ATO logbook requirements, step by step

Who needs a logbook

The logbook method is for sole traders and some partnerships claiming expenses for a car. You keep a logbook to work out your business-use percentage: business kilometres divided by total kilometres, times 100. You then apply that percentage to your total car expenses for the income year. If you claim cents per kilometre instead, you do not need a logbook.

Not sure which method pays more? Compare both with your own numbers on Logbook method: when it pays off.

What goes in it

The logbook as a whole must show:

• when the logbook period begins and ends
• the car's odometer readings at the start and end of the period
• the total kilometres the car travelled in the period
• the kilometres for each journey (several journeys in a row on the same day can be recorded as one)
• the odometer readings at the start and end of each later income year the logbook is valid for
• the business-use percentage for the period
• the make, model, engine capacity and registration number of the car

For each journey, record:

• the reason (a description of the business reason, or that it was private use)
• the start and end date
• the odometer readings at the start and end
• the kilometres travelled

Our free logbook template has a column for each of these. See also the glossary entry What is a logbook?

How to pick 12 weeks

In the first year you use the logbook method, you must keep a logbook for at least 12 continuous weeks during the income year. Those weeks need to be representative of your travel through the year, so avoid a stretch that is unusually quiet or busy.

If you started using the car for business less than 12 weeks before the end of the income year, you can keep the logbook going into the next year to cover the 12 weeks. If you use the method for two or more cars, each car's logbook must cover the same period, and the weeks you choose should be representative of the business use of all the cars.

How long it lasts

Each logbook is valid for five years, and you may start a new one at any time. If you use a logbook from an earlier year to set your business-use percentage, you must keep that logbook and keep recording odometer readings in the later years. If your circumstances change, such as the type of work your business does, you may need a new logbook.

Keep your records

The ATO says you need to keep most business records for 5 years, generally from when you prepared or obtained the record or finished the transaction it relates to, whichever is later. For the logbook method that means the logbook and the evidence of your car expenses: your actual fuel and oil costs (or odometer readings you estimate them from) and your other car expenses.

Easy-to-miss details

• A reason of just “business” says little. The ATO asks for a description of the business reason. Naming the client, site or job does that.
• Odometer readings are needed at the start and end of the period, not only per journey.
• Odometer readings are also needed at the start and end of each later income year the logbook stays in use.