Why maintaining a logbook is a great idea and an ideal time to start now?

Whether you are claiming work car expenses on your tax return or managing FBT on business vehicles, a logbook could save thousands. January is the perfect time to start one and here is why it matters for both individuals and businesses.

For Individuals & Sole Traders: Two ways to claim

Cents per kilometre method:

Capped at 5,000 km × 88c = maximum $4,400 claim

No logbook needed but need to document how you came up with the business KM figure

Only available to individuals and sole traders

Logbook method:

Claim business % of ALL actual car costs (fuel, rego, insurance, servicing, depreciation, loan interest)

Example: 70% business use on $15,000 total costs = $10,500 deduction

That’s $6,100 more in deductions – potentially $2,000+ tax saved

Must keep logbook for 12 consecutive weeks (valid 5 years)

Who should use logbook method?

Driving more than 5,000 business km per year

High car expenses

Companies/trusts (cents per km not available)

For Businesses: Logbooks may reduce your FBT tax payable or Employee contribution amount

If your business provides cars to employees (including yourself as owner/director), you are paying FBT or making an employee contribution to reduce your FBT. A logbook can significantly reduce this cost.

Two FBT calculation methods:

Statutory formula method (no logbookrequired)

FBT based on car’s cost × statutory 20%

Problem: Even if the car is used 90% for business, you are paying FBT on a high percentage of the car’s value

Cannot be used for non-car vehicles with private use portion (e.g. Ute with carry load of 1 tonne or more)

Operating cost method (requires logbook)

FBT based on actual private use %

If logbook shows 15% private use, you only pay FBT on 15% of operating costs

Much lower FBT when business use is high

Example: Company car worth $50,000, total running costs $12,000/year

Statutory method: FBT on ~$10,000+ (20% × $50,000) = ~$9,400 FBT

Operating cost method (if 85% business use): FBT on $1,800 (15% × $12,000) = ~$1,700 FBT

Saving: $7,700 per year with a simple logbook

What you need to record (12 consecutive weeks)

For each journey during the 12-week period:

Date

Odometer start and end readings

Total kilometres

Purpose (e.g., “Client meeting – ABC Pty Ltd”, “Site visit”)

Plus, odometer readings at start and end of the 12-week period.

Critical: Record ALL trips (business AND private) so you can calculate the business/private split.

Should I maintain a logbook if my vehicle is 100% business use?

Short answer: Yes, you should still maintain one.

Many business owners believe their work vehicle is 100% business use, but the reality is often different when you track it properly. Common “private use” trips that catch people out:

Stopping at the shops on the way home from a job

Taking the work vehicle to personal appointments

Using the vehicle on weekends

Driving to the gym before work

Side trips during business travel

Without a logbook, you have no evidence to support a 100% business use claim. If the ATO audits you and finds any private use, your entire claim could be disallowed, or you could face excessive FBT assessments.

For FBT purposes, a valid logbook showing 95% business use is acceptable but claiming 100% business use without any logbook is risky.

FBT-Exempt vehicles: different rules apply

Some vehicles can be FBT-exempt, meaning no FBT applies even if there is some private use. But the rules differ significantly between vehicle types, and many business owners get this wrong.

Commercial vehicles (Utes, vans, trucks):

Can be FBT-exempt if they are designed to carry loads (one tonne+) or 9+ passengers

Exemption only applies if private use is minor, infrequent, and irregular

Examples of acceptable minor private use: driving home after work, occasional detour to drop off supplies

FBT DOES apply if there’s actual private use like:

Weekend family trips

Regular shopping or personal errands

Taking kids to school

Using it as the family vehicle

Important: Having tools or equipment in the vehicle while doing private trips does not make it business use, it is still considered private use

Passenger vehicles (cars, SUVs designed to carry passengers):

Much harder to get FBT exemption

Can only be exempt if the vehicle is:

Parked at your business premises (not at home) overnight, AND

Not available for private use

Requires documentation: Written policy restricting private use, annual declarations from employees

If the car is taken home or available for private use (even if not actually used), the exemption fails

Key takeaway: Just because you drive a Ute does not mean you can use it for personal trips without FBT consequences. The moment private use exceeds “minor and incidental,” FBT applies.

A logbook protects you by showing actual use patterns and providing evidence for your FBT treatment.

Business Travel vs Private: what counts?

Business/deductible: ✓ Client meetings, site visits ✓ Travel between work locations ✓ Business errands (bank, suppliers)

Private/not deductible: ✗ Normal home-to-work commuting ✗ Personal errands, school runs ✗ After-hours personal use

For company cars: Private use includes personal trips by employees/directors AND their family members.

Start in January: here’s why

✓ Finish by March/April, well before EOFY and just in time for FBT year

✓ Valid for 5 years (until 2031)

✓ Captures normal work patterns (not holiday-affected)

✓ Ready for tax planning conversations in April to June

Make it easy: use apps (not sponsored or affiliated)

The following apps can automatically track trips via your phone’s GPS or dedicated tracking devices for more accurate recording:

Driversnote

GoFar

Much easier than paper logbooks, though please note these are paid products with subscription fees.

Common Mistakes That Cost You

❌ Recording only business trips (need ALL trips)

❌ No trip purpose recorded

❌ Missing odometer readings at start/end

❌ Keeping for less than 12 weeks

❌ Using expired logbook (5+ years old and pattern changed)

Your January Action Plan

Record odometer reading now
Download an app or download logbook template online (many free ones available in Excel/Sheets or PDF format)
Track ALL trips for 12 weeks
Keep all car expense receipts
Send completed logbook to us once completed and we will verify it is compliant and maximise your claim OR minimise your FBT