Context and What’s Changed
From 1 July 2026, the ATO’s cents per kilometre rate for work-related car deductions moves to 91 cents per kilometre, a temporary uplift from the base 89¢ engaged by previous determinations. This change applies for the full 2026-27 income year, using the cents per kilometre method. (softwaredevelopers.ato.gov.au)
Who It Affects
- Remote workers traveling between home and alternate work locations (if deductible under ATO rules).
- Hybrid workers doing varied work sites where travel is integral to role (not commuting.
- Gig workers, rideshare, delivery drivers where own vehicle travel is central to supply of services—provided the ATO method applies.
- Not suitable for those who keep detailed logbooks—logbook method may still yield higher deductions depending on actual use and expenses.
How To Use the New Rate Properly
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Ensure you satisfy eligible travel: must be work-related travel, excluding ordinary commute. For remote/hybrid roles, check whether travel between home and workplace qualifies under ATO guidance.
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Election to use the cents per kilometre method: you pick this method (no need for logbook) but cap is 5,000 km per year.
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Record keeping:
- Must record number of km travelled, date, purpose each trip.
- Keep evidence (e.g. odometer, maps) in case ATO requests support.
Example Scenarios
Remote Consultant Sarah travels to clients, 4 times/week, average trip 20 km. Over financial year she accumulates 4,800 km. Under new rate she claims: 4,800 * $0.91 = AUD $4,368, instead of at older rate $4,272.
Hybrid Worker Tom has some days in office, some remote. He must discriminate between commuting (non-deductible) and valid travel. If his valid travel is 3,000 km, new rate yields $2,730 deduction.
Strategic Tips
- Compare methods: Logbook method might yield more if vehicle expenses, depreciation, insurance are high. Always estimate both.
- Keep clear travel logs: As hybrid schedules shift, maintaining a clear travel diary helps if audited.
- Plan in advance: If expecting high travel early in the financial year, consider timing of travel where possible to make full use of the 5,000 km cap.
Conclusion
The rise to 91¢/km isn’t massive but represents real savings if you have substantial eligible travel under the cents per kilometre method. For remote or gig-roles, it's especially relevant. Estimate carefully, document properly, and choose the deduction method that maximises your return under the new rate.