Use the following rates to calculate the allowable expense for using your vehicle for business purposes for the 2019-2020 income year.
As we rely on third-party information that was delayed due to COVID-19, we were previously unable to provide these rates and advised businesses to use the kilometre rates for the 2018-2019 income year instead.
If you filed your 2020 income tax return using the 2018-2019 income year kilometre rates, you can contact us to request a reassessment of your return that will take into account these finalised kilometre rates.
Using the Tier 1 and Tier 2 rates
The Tier 1 rate is a combination of your vehicle's fixed and running costs. Use the Tier 1 rate for the business portion of the first 14,000 kilometres travelled by the vehicle in a year. This includes private use travel.
The Tier 2 rate is for running costs only. Use the Tier 2 rate for the business portion of any travel over 14,000 kilometres in a year.
Using Tier 1 and 2 rates for employee reimbursement
If you're an employer, you can use Tier 1 and Tier 2 kilometre rates to get a reasonable estimate of costs. These will help when reimbursing an employee who has business-related use of the vehicle.
Your employee will need a record showing their business-related use of the vehicle over the income year, such as a logbook. You then use it to calculate the exempt portion of reimbursement using the kilometre rates we've set. For example, use the Tier 1 rate for the business portion of the first 14,000 kilometres (total) travelled by the vehicle in the income year, and then the Tier 2 rates after that.
|Vehicle type||Tier 1 rate per km||Tier 2 rate per km|
|Petrol or diesel||82 cents||28 cents|
|Petrol hybrid||82 cents||17 cents|
|Electric||82 cents||9 cents|