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Budget 2025 | The Government has introduced changes to Working for Families and KiwiSaver as well as introducing Investment Boost: an immediate tax deduction when acquiring new business assets. Find out more: www.budget.govt.nz

The rates set out below apply for the 2024-2025 income year for business motor vehicle expenditure claims. The Tier 1 rates reflect an overall increase in vehicle running costs largely due to fuel costs.

The table of rates for the 2024-2025 income year

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  $1.17 cents 37 cents
Diesel $1.26 cents 35 cents
Petrol hybrid 86 cents 21 cents
Electric $1.08 cents 19 cents

Learn more about using kilometre rates

OS 19 04 (KM 2025): Kilometre rates for the business use of vehicles for the 2025 income year

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

Last updated: 06 Jun 2025
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