Cents per kilometre rate increased for the 2023 income year

The ATO has updated the cents per kilometre rate relating to individual car expenses for the 2023 income year to 78 cents per business kilometre. The cents per kilometre method:

• uses a set rate for each kilometre travelled for business;
• allows taxpayers to claim a maximum of 5,000 business kilometres per car, per year;
• does not require written evidence to show exactly how many kilometres were travelled (but the ATO may ask taxpayers to show how they worked out their business kilometres, for example diary records); and
• uses a rate that takes all vehicle running expenses (including registration, fuel, servicing and insurance) and depreciation into account.

Ref: ATO website, Income Tax Assessment - Cents per Kilometre Deduction Rate for Car Expenses Determination 2022, 9 June 2022 

Visit the ATO website to find out more.