For most tradies, the work vehicle is the single largest tax deduction available. Getting the claim method right can mean thousands of dollars difference in your tax bill.
The cents-per-kilometre method is simple: claim a flat rate (currently 85 cents per km for 2025-26) for business kilometres driven, up to a maximum of 5,000 km per year. That caps the deduction at $4,250. You don't need a logbook, but you do need to be able to show how you calculated the kilometres (a diary or calendar is sufficient). This method suits tradies who do limited driving or use a personal car occasionally for work.
The logbook method tracks actual expenses (fuel, registration, insurance, repairs, depreciation or lease payments, tyres) and claims the business-use percentage. You must keep a logbook for a continuous 12-week period, recording every trip (date, start/end odometer, purpose). The logbook is valid for 5 years as long as your usage pattern doesn't change significantly. If 80% of your kilometres are business, you claim 80% of all vehicle running costs.
For tradies who drive regularly between job sites, the logbook method almost always gives a larger deduction. A ute doing 30,000 km per year with 75% business use and $12,000 in running costs yields a $9,000 deduction — more than double the cents-per-km cap.
Important: travel between home and your regular workplace is not deductible (it's private commuting). But travel between job sites during the day, travel to a client site that is not your regular workplace, and travel carrying bulky tools that cannot be stored at your workplace are all business kilometres.