What’s the Change?
From 1 July 2026, the ATO updated the cents-per-kilometre rate for work-related car expenses to 91 cents per kilometre for the 2026-27 income year. This reflects a one-off uplift of 2 cents to the base rate of 89c, in response to cost pressures. After 2026-27, the standard base rate (89c) plus indexation will apply unless updated. (softwaredevelopers.ato.gov.au)
This rate applies for individuals who elect to use the cents per kilometre method under their tax return – not for those who itemise actual car expenses. (softwaredevelopers.ato.gov.au)
Who This Impacts Most
Digital nomads, remote workers, gig-economy and Rideshare drivers generally fall under the group that may benefit:
- Those who regularly use a personal car for work-related travel (excluding commuting to regular workplace).
- Remote workers travelling between multiple locations—client visits, coworking spaces, training, etc.
- Occasional work-related travel within a flexible schedule where detailed logbooks are not kept.
How to Apply the 91c/km Rate
Eligibility requirements:
- You must have spent money on car running costs yourself, not been reimbursed.
- Travel must be for earning income (e.g. between work sites, client meetings)—daily travel from home to a fixed workplace is generally excluded. (ato.gov.au)
- You must keep travel records: dates, trips travelled, odometer readings or written note of distances. Aggregated records are accepted under the cents-per-kilometre method. (ato.gov.au)
Example Usage
Let’s assume Alex is a digital consultant based in Melbourne and during 2026-27 he drives 10,000 km for client meetings, site visits, and coworking spaces. Using 91c/km:
10,000 km × $0.91 = $9,100 deduction
If instead he used itemised method (maintenance, fuel, depreciation) and keeps receipts, his deduction could be higher—but this method is more burdensome.
Recordkeeping and Compliance Tips
- Keep a trip log: destination, purpose, date, distance. Even a simple spreadsheet is acceptable under the cents-per-kilometre method. (ato.gov.au)
- Do not mix methods for the same vehicle—choose one per year.
- If reimbursed partially by employer, you can only claim the portion you incur.
- If you have actual expenses significantly higher (insurance, major repairs), compare itemised vs kilometres to ensure best deduction.
What Remote workers Should Consider
- Multiple “workplaces”: For digital nomads or remote workers without a fixed principal place of work, clients’ sites or coworking spaces may qualify as work sites—check in your jurisdiction.
- Travel between homes: If you work from different home locations—travel between them may count if those homes are distinct workplaces.
- Balancing time vs deduction: Itemised method often gives higher deductions but needs more effort; kilometre method is simple.
Conclusion
The updated 91c/km rate gives remote, flexible, and travel-heavy workers a better way to claim work-related travel without detailed logs. For those whose car costs are modest or who prefer simplicity, the cents-per-kilometre method offers a low-hassle option. Others may still benefit from itemising actual costs. Always keep records and run the numbers before you lodge.