Car Claims For Electric Vehicles: What You Need To Know

As electric vehicles (EVs) become increasingly popular across Australia, more business owners and professionals are considering the tax implications of using an EV for work purposes.

While the benefits of electric driving are clear – reduced emissions, lower running costs, and cutting-edge technology – understanding how to correctly claim car-related expenses can be more complex than with traditional petrol vehicles.

At Wilson Pateras, we help our clients navigate these evolving tax rules with confidence.

This article explains how you can claim business expenses for your electric vehicle, the records you need to keep, and the methods available to ensure your claims are accurate and compliant with Australian Tax Office (ATO) guidelines.

Understanding What Trips Qualify as Business Use

Before you begin calculating your EV-related deductions, it’s essential to determine which trips qualify as business-related.

Business travel generally includes:

• Attending meetings or conferences away from your usual place of work;
• Collecting supplies or making deliveries;
• Travel between two separate places of work (for example, between your primary job and a second job);
• Travel from your home or usual workplace to a client site or alternative work location; or
• Itinerant work, where your role requires visiting multiple locations in one day.

However, everyday commuting between home and your regular workplace is generally not deductible, except in limited cases, such as when transporting bulky tools or equipment that cannot be securely stored elsewhere.

The Cents Per Kilometre Method

For many taxpayers, the cents per kilometre method is the simplest way to claim car expenses.

For the 2025-26 financial year, you can claim 88 cents per kilometre for up to 5,000 business kilometres. This covers all car-related costs, including:

• Depreciation;
• Insurance;
• Registration;
• Maintenance; and
• Fuel or charging expenses.

To use this method, you must keep a record showing how you calculated your business kilometres, such as a travel diary, and confirm that you own or lease the vehicle.

This approach applies equally to petrol, hybrid, plug-in hybrid (PHEV), and fully electric vehicles.

The Logbook Method

If your vehicle is used heavily for business, the logbook method may provide a greater deduction.

This method requires you to keep:

• Receipts or records for all car-related expenses (insurance, registration, repairs, maintenance, charging, and depreciation); and
• A 12-week logbook recording every business trip, including dates, destination, purpose, and odometer readings.

From this, you calculate your business-use percentage, which is then applied to your total car costs. Your logbook remains valid for five years unless your usage pattern changes significantly – for example, if you change jobs or move house.

For traditional vehicles, you’ll need receipts for petrol and oil expenses, or you can make a reasonable estimate based on odometer readings, manufacturer fuel consumption rates, and average fuel prices from the Australian Institute of Petroleum.

Claiming Electricity Costs for Electric Vehicles

When it comes to electric vehicles (EVs), electricity costs replace fuel costs – but tracking these expenses requires a different approach.

If you charge at a commercial station, you need to keep receipts for each transaction. These records are straightforward and can be claimed directly.

If you charge at home, electricity use for the vehicle is usually combined with your household consumption and can be difficult to separate. To simplify this, the ATO allows taxpayers to use a home charging rate of 4.2 cents per kilometre for the total distance travelled during the income year.

This fixed rate covers all electricity costs related to charging your EV. If you use it, you cannot also claim commercial charging costs.

However, if your EV system allows you to determine the proportion of home versus commercial charging, you can:

• Multiply your home-charging kilometres by the 4.2c rate; and
• Add your substantiated commercial charging costs on top.

Keep your electricity bills, odometer readings, and charging receipts to support your claim. These costs can then be added to other vehicle expenses and apportioned according to your logbook’s business-use percentage.

Plug-In Hybrids (PHEVs)

Plug-in hybrid vehicles (PHEVs) are both petrol and electricity, which makes the calculation a little more involved.

To simplify this process, the ATO has introduced a draft seven-step methodology to calculate the combined fuel and electricity cost for PHEVs.

1. Calculate actual petrol costs – Gather your petrol and oil receipts (or accurate records) for the income year.
2. Convert petrol spend to litres – Divide your total petrol spend by the average petrol price per litre.
3. Calculate petrol-driven kilometres – Use your PHEV’s manufacturer fuel economy figure (usually the “Condition B” test cycle rating) to determine how many kilometres you drove using petrol.
4. Determine total kilometres travelled – Use your odometer readings to find the total distance driven for the year.
5. Work out electric kilometres – Subtract your petrol kilometres from the total kilometres to determine the number driven using electricity.
6. Calculate home charging costs – Multiply your electric kilometres by the ATO’s home charging rate (currently 4.2 cents per kilometre) to find your electricity costs.
7. Combine petrol and electricity costs – Add the petrol and electricity amounts to arrive at your total fuel cost for the year.

Once you’ve established your total fuel and charging costs, apply your logbook’s business-use percentage to claim the deductible portion.

Additional Considerations for PHEVs

• Record keeping is crucial. Keep odometer readings, receipts, electricity bills, and manufacturer’s official fuel economy data.
• Commercial charging stations VS home charging. If your vehicle tracks the proportion of each, you can apportion costs accordingly. Otherwise, you’ll need to choose between the 4.2c home charging rate or actual commercial costs.
• Draft guidance status. This seven-step process forms part of the ATO’s draft ruling (PCG 2024/2DC), which is currently under consultation. It’s advisable to review the finalised guidance before claiming.

With the right records and advice, you can ensure your claims are accurate and compliant, without missing legitimate deductions.

Wilson Pateras & Navigating the EV Claims Process with Confidence

Electric vehicles represent the future of Australia’s transport – but they also introduce new considerations for tax and compliance.

Whether you’re transitioning to an EV for business or already managing one, understanding your claim options can make a significant difference to your tax outcome.

At Wilson Pateras, we combine technical tax expertise with practical advice to help clients make informed, confident financial decisions.

Get in touch with our team if you’d like assistance calculating your electric vehicle deductions or understanding how these rules apply to your circumstances.