Can sole traders claim car expenses?
Learn when sole traders may be able to claim motor vehicle expenses and what records the ATO expects.
Summary
Sole traders may be able to claim motor vehicle expenses where the expenses relate to running the business. The ATO explains that motor vehicle expenses can include fuel, repairs, servicing, insurance, and other vehicle costs, depending on business use and calculation method.
What this means
Car expenses need to be connected to business use. If a vehicle is used for both business and private purposes, only the business portion can generally be claimed.
The ATO provides different methods for calculating motor vehicle expenses. Sole traders and some partnerships may be able to use the cents per kilometre method or the logbook method for eligible car-related business expenses.
Typical actions
- Record business-related trips.
- Separate private use from business use.
- Choose an appropriate calculation method.
- Keep receipts and logbook records where required.
- Review the ATO’s motor vehicle expense rules before claiming.
Official ATO sources
Last checked: 20 June 2026
Motor vehicle expenses
Explains business-related vehicle expenses for small businesses.
Deductions for motor vehicle expenses
Explains types of motor vehicle expenses that may be claimable.
Motor vehicle expense calculation methods
Explains methods that may apply to sole traders and some partnerships.
Cents per kilometre method
Explains the cents per kilometre method.
Related questions
- What deductions can sole traders claim?
- What records do sole traders need to keep?
- Can sole traders claim home office expenses?
- Do sole traders need a separate business bank account?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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