Working out the cost of electricity used to run your electric vehicle (EV) where you use the vehicle for business purposes and you use the logbook method for making your claim for car expenses is a little more complex than monitoring the cost of fuel used to run an all-petrol vehicle. You need to keep certain records and make some choices along the way.
But first, a quick look at some of the basic rules around tax claims for the business use of cars, including EVs.
What Trips Are Eligible?
Costs incurred in running your car for business purposes can be deducted using one of several methods. The term “business purposes” includes:
- Attending meetings or conferences away from your usual place of work
- Collecting supplies or delivering items
- Travel between two separate places of work (e.g. for a second job)
- Travel from your home or your usual place of work to an alternative worksite (e.g. a client’s office or worksite), and
- Itinerant work, where the job requires you to work at more than one location each day before going home.
Travel between your home and your usual place of work is only deductible in quite limited circumstances — for example, when transporting bulky equipment to and from a worksite.
Cents Per Kilometre
For many taxpayers, the statutory safe harbour rate of 88 cents per kilometre for the 2025–26 income year for up to 5,000 business kilometres can be the best way of claiming car expenses. It gets you a deduction of up to $4,400 without having to keep any receipts.
The cents per kilometre method covers all car expenses, including depreciation, registration and insurance, repairs and maintenance, and fuel costs. If you use this method, you can’t add any of these costs on top of the per-kilometre amount. The method applies to EVs (including plug-in hybrids — PHEVs) as well as petrol-only cars.
You will need to keep records showing how you worked out your business-related kilometres — a travel diary covering the entire income year works well. You also need to show that you own or lease the car.
Logbook Method
The cents per kilometre method won’t always be optimal. If you have a high percentage of business use, the logbook method may give you a better result. You’ll need to keep receipts or other evidence of all car expenses, as well as completing a logbook for a representative and continuous 12-week period. The logbook needs to show the destination and purpose of each business trip, plus total kilometres travelled and opening/closing odometer readings for the logbook period. The percentage of business use is worked out using the logbook and applied to the total running costs.
The logbook can be relied upon for five years, unless your pattern of use changes significantly (e.g. you move house or the nature of your job changes). If that happens, you’ll need to complete a new 12-week logbook.
For a non-electric car, you then keep receipts for fuel and oil, or make a reasonable estimate based on odometer readings, standard fuel use per the manufacturer, and average petrol prices (per the Australian Institute of Petroleum website). You should also keep receipts for registration and insurance, repairs and maintenance, lease payments and interest charges, and records showing the cost of the car and how you’ve calculated your depreciation claim.
Our individual tax team can help you work through which method gives the best result for your situation.
Electric Vehicles
EVs are typically charged at both commercial charging stations and using home chargers. Keep a record of the cost of commercial charging stations — that’s straightforward enough.
For home charging, electricity usage for charging EVs is combined with total household consumption and generally can’t be separately identified.
Unless your EV can report the percentage of home charging, the best approach is to use the Commissioner’s home charging rate of 4.2 cents per kilometre applied to the total distance travelled by the EV during the income year. This rate covers all electricity costs for the EV, so if you use it, you cannot also claim commercial charging station costs.
Where you can determine the home vs commercial charging split, you can calculate total kilometres attributable to home charging, multiply by the 4.2 cents rate, then add commercial charging station costs.
You must still keep receipts substantiating commercial charging station costs, keep an electricity bill, and record opening and closing odometer readings. Once you’ve calculated electricity costs, add them to all other running costs (including depreciation) and claim the business proportion per your logbook.
Plug-in Hybrids (PHEV)
PHEVs are trickier than pure EVs since they use both petrol and electricity. The ATO has a seven-step method statement for calculating combined petrol and electricity costs applicable to a PHEV.
What you need to bring to your lodgement meeting:
- Your PHEV’s actual petrol and oil costs for the period
- Opening and closing odometer readings, and
- Your PHEV’s Condition B test cycle fuel economy figure (per the manufacturer).
We will do the rest and ensure you are claiming your legitimate entitlement. Contact us if you have any questions ahead of time, or learn more about our accounting and tax services.