The rate is 91 cents per kilometre for the income year commencing 1 July 2026, set for that year alone, and was 88 cents for the two years before it. The method covers the first 5,000 business kilometres per car per year and no further. One rate applies to every car, whatever its engine size, and no receipts have to be kept for the car expenses themselves.
| Income year | Rate (cents per km) | Set by |
|---|---|---|
| 2026-27 | 91 | Determination 2026 (F2026L00785), section 6, that year only |
| 2025-26 | 88 | Determination 2024 (F2024L00697), section 6 |
| 2024-25 | 88 | Determination 2024 (F2024L00697), section 6 |
Earlier years were set the same way, each determination repealing the one before it. The 2024 determination repealed the 2023 determination, and the 2026 determination repealed the 2024 one. Rates for those earlier years are not listed here because they were not read from the instruments themselves.
A determination is not always written one year at a time, and the two most recent ones are drafted differently. The 2024 determination set the rate "for income years commencing on or after 1 July 2024", and its own note says it applies to the year commencing 1 July 2024 and to any subsequent income year until it is repealed or varied. Nothing replaced it for 2025-26, so 88 cents carried through unchanged.
The 2026 determination repealed it and is written for one year only. Section 6 sets the rate "for the income year commencing on 1 July 2026", and it carries no note extending that to subsequent years. So 91 cents does not carry forward the way 88 cents did. A further determination has to be registered to set the rate for 2027-28, and until one is there is no rate for that year to rely on.
Section 28-25 of the Income Tax Assessment Act 1997 sets the calculation: business kilometres travelled by the car in the income year, multiplied by the rate determined for that year. Four features of it catch people out.
91 cents per kilometre, set by section 6 of the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026.
88 cents per kilometre. The 2024 determination set that rate for income years commencing on or after 1 July 2024, and nothing replaced it before the 2025-26 year, so it carried through.
Not yet set. Section 6 of the 2026 determination sets 91 cents for the income year commencing on 1 July 2026 only, and it carries no note extending that to later years, so a further determination has to be registered before there is a rate for 2027-28.
The first 5,000 business kilometres per car per income year. Kilometres above 5,000 are discarded rather than paid at a lower rate, so a car that travelled 5,085 business kilometres claims 5,000.
No. A single rate applies to every car for the income year. The engine capacity bands belong to an older version of the method.
No. The Commissioner sets the rate by having regard to average operating costs, and the Act names registration, insurance, depreciation, fuel and maintenance as examples of those costs. They are already inside the rate.
General reference only, not tax, legal or financial advice, and using it creates no professional relationship. Rates here were read from the determinations on the date above. Check the current instrument on the Federal Register of Legislation, or current ATO guidance, before relying on a figure.