We set the kilometre rates each year based on information about vehicle costs in the past income year. Employers may use these rates as a reasonable estimate of what it costs employees to use their private vehicle for business.
However, reimbursements are usually made in the current income year. This means the published rates may not always reflect current costs.
Future guidance
Due to the changes in fuel prices we are considering providing more guidance for employers' reimbursements. This guidance will provide more certainty to employers when working out reasonable amounts to reimburse employees for the business use of their private vehicle.
This is expected for the 2027 income year. In the meantime, you can still use the 2025-2026 kilometre rates or another method that provides a reasonable estimate of your employee’s costs.
You can read more about the kilometre rates on our Tax Technical website.