ATO Cents-per-Kilometre Rate 2026–27: 91c, Capped at 5,000 km

For the 2026–27 income year the ATO’s cents-per-kilometre rate is 91 cents per km, for up to 5,000 business kilometres per car. It was 88 cents for both 2024–25 and 2025–26. Past 5,000 km the method pays nothing more: there is no lower second tier, the claim simply stops.

ATO cents-per-kilometre rates

Income year	Rate per business km	Most you can claim per car
2026–27 (1 July 2026 – 30 June 2027)	91c	5,000 km × 91c = $4,550
2025–26	88c	5,000 km × 88c = $4,400
2024–25	88c	$4,400

Source: ATO, Cents per kilometre method. Checked 22 September 2026.

What the method covers, and what it asks of you

The rate covers all your car’s running costs, including fuel, registration, insurance, servicing and depreciation, so you claim none of those separately. You do not need receipts or a formal logbook for it, but the ATO expects you to be able to show how you worked out your business kilometres, for example with a diary of work trips. A record made as you drive is the easiest way to do that.

Travel between home and your regular workplace is private travel and does not count, however far it is. Trips between workplaces, to clients and to alternative work sites generally do.

When the logbook method beats 91 cents

The cap is the whole story. A delivery driver doing 20,000 business km a year can claim only 5,000 of them this way, $4,550, however much the car costs to run. The logbook method instead claims the business-use percentage of your actual car expenses, established by a logbook kept for a continuous 12-week period that represents your normal use. If you drive well past 5,000 business km, run the logbook numbers before settling for the cap. How to keep an ATO 12-week logbook lists what it has to record and how long it lasts.

A worked example

A real-estate agent drives 3,800 business km in 2026–27: 3,800 × 91c = $3,458. A colleague who drives 7,200 business km claims the capped $4,550, and the 2,200 km above the cap earn nothing under this method. Because the income year starts on 1 July, a trip on 30 June 2026 belongs to 2025–26 at 88c.

How TaxMiles handles the ATO scheme

• Kilometres and Australian dollars. A phone set to Australia uses the ATO scheme automatically; you can also choose it under Settings > Tax Region.
• The income year runs from 1 July, and totals are labelled 2026/27.
• The 5,000 km cap is enforced: trips are rated in date order and anything past the cap is valued at nothing, so the total never exceeds $4,550 for 2026–27.
• By date: trips before 1 July 2026 use 88c, trips from 1 July use 91c.
• No medical or charity rate, because the ATO publishes none for this method.
• Tax estimate uses a resident rate you choose from 16%, 30%, 37% or 45%, plus the 2% Medicare levy. An estimate, not a return.

Want a quick number first? The mileage calculator has a tab for this scheme.

For how Australia compares with the UK and Canada, see mileage deductions outside the US.

General information about ATO car-expense methods, not tax advice. Check ATO guidance or ask a registered tax agent about your circumstances before you lodge.

Frequently asked questions

What is the ATO cents per km rate for 2026-27?

91 cents per business kilometre from 1 July 2026, for up to 5,000 km per car. It was 88 cents for 2024-25 and 2025-26.

What happens after 5,000 km?

Nothing more is claimable under the cents-per-kilometre method. To claim more, use the logbook method, which claims your business-use percentage of actual car costs.

Do I need a logbook for the cents per km method?

No formal logbook or receipts, but you must be able to show how you worked out your business kilometres, for example with a diary of work trips.