Digital Nomad
Understanding ATO’s Cents-per-Kilometre Rate Change for 2026-27: What Digital Nomads and Remote Workers Should Know
ATO updated the car rate to 91c/km for 2026-27. For travel-heavy remote workers or digital nomads, here’s how to apply it and maximise deductions.
By NomadicTax Research Team • 5 min read • August 27, 2026
## 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](https://softwaredevelopers.ato.gov.au/CentsperKilometreDeductionRateforCarExpenses?utm_source=openai))
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](https://softwaredevelopers.ato.gov.au/CentsperKilometreDeductionRateforCarExpenses?utm_source=openai))
## 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](https://www.ato.gov.au/myTax25Deductions?utm_source=openai))
* 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](https://www.ato.gov.au/myTax25Deductions?utm_source=openai))
## 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](https://www.ato.gov.au/myTax25Deductions?utm_source=openai))
* 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
1. **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.
2. **Travel between homes**: If you work from different home locations—travel between them may count if those homes are distinct workplaces.
3. **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.