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Use the following rates to calculate the allowable expense for using your vehicle for business purposes for the 2020-2021 income year.

Tier 1 rates have reduced to reflect lower fuel, interest and maintenance costs.

Using the Tier 1 and Tier 2 rates

The Tier 1 rate is a combination of your vehicle's fixed and running costs. Use it 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 it for the business portion of any travel over 14,000 kilometres in a year.

Vehicle type Tier 1 rate per km Tier 2 rate per km
Petrol or diesel 79 cents 27 cents
Petrol hybrid 79 cents 16 cents
Electric 79 cents 9 cents

Learn more about using kilometre rates

Claiming vehicle expenses

OS 19/04A: Commissioner's statement on using a kilometre rate for business running of a motor vehicle - deductions

OS 19/04B: Commissioner's statement on using a kilometre rate for employee reimbursement of a motor vehicle


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Last updated: 07 Jun 2021
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