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Work-related car expenses

Though an allowance given to you by your employer for car expenses is considered assessable income which must be included on your tax return, you may be able to deduct the work-related car expenses that this allowance covers.

The ATO defines a car as “a motor vehicle designed to carry a load of less than one tonne and less than nine passengers.” Expenses for vehicles that do not qualify as a car, including motorcycles, fall under work-related travel expenses.

You can only claim car expenses for your actual car. The costs that you incur with a borrowed car are considered travel expenses.

Most of the driving you do between home and work is not deductible but in certain circumstances you may be able to claim this travel, if you are transporting bulk tools or equipment, for example, or driving between two separate places of employment.