Tradie Vehicle Logbook: The ATO Rules, How to Keep One, and Why It's Worth It

Your ute is probably one of your biggest business expenses. Fuel, registration, insurance, tyres, servicing, and depreciation add up fast — and the ATO lets you claim all of it, for the work-use portion of your vehicle. But to claim the full actual cost method (which is almost always worth more than the alternative), you need a logbook.

Many tradies skip the logbook because it sounds like extra work. This guide explains exactly what the ATO requires, how to keep a logbook correctly, why it's almost certainly worth the effort, and what happens if you get it wrong.

The Two Methods for Claiming Vehicle Expenses

The ATO gives you two ways to claim vehicle expenses as a sole trader or in a business:

Method 1: Cents Per Kilometre

You claim a flat rate per business kilometre driven. For 2025–26, the rate is 88 cents per kilometre, up to a maximum of 5,000 business kilometres per year.

Maximum claim: 5,000 km × $0.88 = $4,400

No logbook required. You do need to be able to show how you calculated your business kilometres (a diary or estimate based on your work pattern).

Method 2: Actual Cost (Logbook Method)

You track your total kilometres and your business kilometres over a 12-week logbook period. This establishes your business-use percentage. You then claim that percentage of all your actual vehicle expenses — fuel, rego, insurance, servicing, tyres, loan interest, and depreciation.

No maximum applies. A tradie driving 40,000 km/year with 85% business use and $22,000 in annual vehicle costs could claim $18,700.

For most tradies, the logbook method produces a dramatically higher deduction than the cents-per-kilometre method. The 88 cents per kilometre rate is designed to be simple — it's not designed to maximise your deduction.

When Is a Logbook Worth It?

A logbook is worth keeping whenever your actual vehicle claim would exceed $4,400. That's a low bar. If your ute's annual running costs (fuel, rego, insurance, servicing) are $15,000 and you use it 80% for work, your actual claim is $12,000 — nearly three times the cents-per-km cap.

The break-even calculation: if your total annual vehicle costs multiplied by your estimated business-use percentage exceeds $4,400, a logbook will save you money.

For most working tradies with a dedicated work ute, this is almost always the case.

What the ATO Requires in a Logbook

The ATO has specific requirements for what a valid logbook must contain. Each journey recorded must include:

1. The date of the journey

2. The reason for the journey (e.g., "travel to job site — 14 Smith St Dandenong", "pick up materials from Bunnings Frankston")

3. The odometer reading at the start of the journey

4. The odometer reading at the end of the journey

5. The kilometres travelled

The logbook must also record:

• The make, model, and registration of the vehicle
• The date the logbook period began and ended
• The total kilometres travelled during the logbook period
• The total business kilometres recorded

The 12-Week Rule

A logbook must cover a continuous period of at least 12 weeks. This 12-week period is intended to represent your typical vehicle use throughout the year. You then apply the business-use percentage established in your logbook to the full 12 months of vehicle expenses.

Once you have a valid 12-week logbook, it remains valid for five years — provided your vehicle use pattern doesn't change significantly. You don't need to repeat the logbook every year. After five years, or if your circumstances change materially, you need a new one.

If you buy a new vehicle, you need a new logbook for that vehicle.

What Counts as Business Use

Business kilometres include:

• Travel between job sites (one site to another in the same day)
• Travel to pick up materials (from the trade counter, Bunnings, suppliers)
• Travel to meet clients for quotes
• Travel to the bank, accountant, or other business-related destinations
• Carrying tools or equipment to and from work sites

Travel between your home and a regular workplace is generally not deductible as it is considered ordinary commuting. However, if your home is also your base of operations (i.e., you go directly to different job sites each day and don't have a fixed office or workshop), this travel can often be claimed.

The ATO's rule is nuanced here: if you carry tools that are too bulky or valuable to leave at the worksite, travel from home to a job site with those tools loaded may be deductible. This applies to many tradies — if your ute is loaded with tools every day and you drive directly to jobs, keep records of this.

How to Keep a Logbook in Practice

Using a Paper Logbook

Available from newsagents, Australia Post, and office supply stores. Small enough to keep in your glove box. Record each business trip at the end of each day or as you go.

The habit: at the start of each work day, note your odometer reading. At the end of the day, note it again and log the trips made. This takes 2 minutes per day.

Using an App

Several apps automate most of the logbook process:

ATO myDeductions (free): The ATO's own app has a built-in logbook feature. It tracks trips via GPS and records your odometer readings. You classify each trip as business or personal and add the purpose. Data exports to help pre-fill your tax return.

MileIQ: Automatically detects and logs every drive using your phone's location services. You swipe left or right to classify trips as personal or business. Creates exportable reports for your accountant.

Driversnote: Similar to MileIQ. Automatic trip detection, business/personal classification, and reporting. Works well integrated into fleet or business setups.

TripLog: Another automatic GPS tracking app with additional business reporting features.

Using an app is by far the easiest way to keep a valid logbook. The GPS data provides a defensible record if the ATO ever queries your claim, and the automatic detection means you're unlikely to miss trips.

Odometer Records

In addition to the logbook, you need to record your odometer reading at the start and end of the logbook period, and at 30 June each year (even after the logbook period ends). This establishes the total annual kilometres driven and lets you calculate the business-use percentage for the year.

A simple note in your phone or a photo of the odometer on 30 June each year is sufficient.

Calculating Your Business-Use Percentage

Once your 12-week logbook period is complete:

Business-use % = Business km ÷ Total km × 100

Example: In 12 weeks you drove 6,200 km total, of which 5,100 km were for business.

Business-use % = 5,100 ÷ 6,200 × 100 = 82.3%

You then apply this percentage to all vehicle expenses for the full year.

Example annual costs: $18,500 (fuel $6,000 + rego $800 + insurance $2,200 + servicing $1,500 + depreciation $8,000)

Deductible amount: $18,500 × 82.3% = $15,225

Versus the cents-per-km alternative: 5,000 km × $0.88 = $4,400.

The logbook method produces $10,825 more in deductions in this example — at the 30% marginal tax rate, that's an additional $3,247 in tax saved. The logbook is clearly worth the effort.

Depreciation on Your Ute

Vehicle depreciation is often the largest single component of the vehicle deduction for tradies who own (rather than lease) their ute. Depreciation reflects the decline in value of the vehicle over its effective life.

For vehicles used both for business and personal purposes, you can only claim the business-use portion of depreciation.

Commercial vehicles (utes with a payload of 1 tonne or more) are not subject to the car depreciation limit of $69,674 — which means the full value of the vehicle can be depreciated if it qualifies as a commercial vehicle.

If your ute cost $55,000 (GST-exclusive) and has an effective life of 8 years, annual straight-line depreciation is $6,875. At 82% business use, you can claim $5,637 in depreciation per year. Your accountant can advise on the most appropriate depreciation method for your situation.

What Happens If You're Audited Without a Logbook?

The ATO can audit returns going back five years. If you've been claiming vehicle expenses using the actual cost method without a logbook, you're exposed. In an audit, the ATO will:

• Disallow the actual cost claim
• Allow only the cents-per-kilometre amount instead
• Apply penalties and interest on the additional tax owed

The penalties for incorrect claims depend on the circumstances — from 25% (for a mistake) up to 75% (for intentional disregard). General interest charge applies on top.

This is a real risk. Vehicle deductions are one of the ATO's most common audit triggers for small business owners. A logbook is your protection.

Sole Trader vs Company Vehicle

The treatment differs slightly depending on your business structure:

Sole trader: The vehicle is usually owned by you personally. You claim the business-use portion of running costs on your tax return. The logbook method and cents-per-km method both apply.

Company: The vehicle can be owned by the company (a company car). All costs are business expenses. However, if the vehicle is used for personal trips, Fringe Benefits Tax (FBT) may apply. The FBT rules for company vehicles are more complex — an accountant should set this up correctly.

Getting Started

If you don't have a logbook and have been using the cents-per-kilometre method (or claiming nothing), the best time to start one is now.

Download the ATO myDeductions app or MileIQ today, turn on automatic trip detection, and start logging. After 12 continuous weeks, you have a valid logbook that can be applied to your vehicle costs for the current and next four financial years.

The tax saving for most working tradies significantly outweighs the 2 minutes per day the logbook requires.

Tradie Money AU provides practical financial guidance for Australian tradies. This article is general in nature — speak with a registered tax agent for advice specific to your vehicle and business situation.