2026-27 mileage rates in Australia

For the 2026-27 tax year, from 1 July 2026 to 30 June 2027, the Australian Taxation Office (ATO) has set the cents per kilometre rate at $0.91 for eligible business-related car travel.

The ATO's cents per kilometre method provides a simplified way to calculate your car expense deduction. The rate covers your car's running costs and depreciation, so these costs cannot also be claimed separately. You can claim a maximum of 5,000 eligible business kilometres per car per tax year using this method.

Calculation of your deduction

To understand how the calculation works, consider the following example: Suppose you have travelled a total of 1,000 eligible business kilometres during the tax year. By applying the ATO's rate of $0.91 per kilometre, your deduction would be $910 (1,000 km x $0.91). This is a deduction from your taxable income, not a direct tax refund.

Employer reimbursements are separate from this tax deduction. You cannot claim a deduction for expenses that your employer has already reimbursed.

Record-Keeping and documentation

You do not need receipts for the car expenses covered by the cents per kilometre rate, but you must be able to show how you calculated your business kilometres. Keep records of your work-related trips, including their dates, distances and purposes. Retain receipts for any separately claimed eligible expenses, such as work-related parking fees or tolls.

By understanding the mileage rates and guidelines set by the ATO, you can calculate your eligible car expense deduction for the 2026-27 tax year. Should you require further assistance or have specific questions related to your circumstances, consider consulting a tax professional or contacting the ATO directly for personalised guidance.