Claiming car expenses using the ATO cents-per-km method is one of the simplest deductions available to healthcare locums, whether you are a GP covering multiple clinics, a pharmacist doing relief shifts across a region, or a physio travelling between NDIS clients. The rate for both the 2024-25 and 2025-26 financial years is 91 cents per kilometre, capped at 5,000 business kilometres per car each year. Getting this deduction right can mean several hundred dollars back at tax time, so it is worth understanding the rules before you lodge.
This article is general information only and is not personal financial or tax advice. Speak with a registered tax agent about your own circumstances.
What the Cents-Per-Km Rate Actually Covers
The 91c/km rate is a flat, ATO-set amount that covers all car running costs in one: fuel, oil, registration, insurance, servicing, and the decline in value of the vehicle. Because all of those costs are bundled in, you cannot claim any of them separately if you use the cents-per-km method. The rate applies to cars (passenger vehicles and goods-carrying vehicles with a load capacity under one tonne and fewer than nine seats). Motorbikes and vehicles above those thresholds use different rules.
For 2024-25, the 91c/km rate was set by the ATO's legislative instrument LI 2024-19. The same rate carries into 2025-26. At the cap of 5,000 km, the maximum deduction is $4,400 per car per year, which reduces your assessable income dollar for dollar at your marginal rate.
The 5,000 km Cap and What It Means in Practice
The 5,000 km cap applies per car, per income year. If you drive more than 5,000 business kilometres in a year, you can still only claim 5,000 km under this method. In that situation the logbook method, described below, is often a better fit.
For locums who do a moderate amount of travel between workplaces, 5,000 km is a reasonable ceiling. A locum GP covering two suburban clinics each week might drive around 3,000-4,000 km in a year on work trips. A rural pharmacist or paramedic travelling between sites regularly could hit the cap mid-year, at which point a switch to logbook becomes worthwhile.
Which Trips Are Deductible
The ATO distinguishes sharply between deductible and non-deductible car travel. As a healthcare locum the key rules are:
Deductible trips:
- Travel directly between two separate workplaces on the same day, for example driving from one clinic to a hospital ward shift.
- Travel from your home to a workplace that is not your regular place of employment, where your home is a genuine base of operations (itinerant workers who have no fixed workplace may qualify for home-to-work deductions, but this is a higher test and requires advice).
- Travel to pick up bulky equipment that cannot be stored at a workplace, for example carrying portable monitoring equipment to a home visit.
Not deductible:
- The ordinary commute from home to your first workplace and from your last workplace back home. This applies even if you work across multiple agencies.
- Travel that is private in nature, including personal errands made on the same trip.
For locums working at several sites in a single day, the direct workplace-to-workplace leg is the deductible part. Keeping a simple trip log, whether in a notebook or an app, that records the date, origin, destination, and purpose of each trip is the ATO's recommended minimum record.
Cents-Per-Km vs Logbook: Choosing the Right Method
The two ATO-approved methods for claiming car deductions are the cents-per-km method and the logbook method. You can choose which to use each year.
| Cents-per-km | Logbook | |
|---|---|---|
| Rate / calculation | 91c/km (flat) | Actual expenses x business-use percentage |
| Annual km cap | 5,000 km | No cap |
| Records needed | Reasonable estimate of km, trip purpose | 12-week continuous logbook, all receipts |
| Decline in value | Included in rate, not claimed separately | Claimed as a separate deduction |
| Best for | Lower-mileage locums, simplicity | High-mileage locums, expensive vehicles |
If your business kilometres are consistently close to or over 5,000, or if your vehicle is expensive to run and your business-use percentage is high, the logbook method will usually produce a larger deduction. The logbook only needs to be kept for 12 consecutive weeks and then remains valid for five income years provided your travel pattern does not change significantly.
You cannot combine both methods for the same car in the same year, but if you have two cars you can use a different method for each.
Record-Keeping Without the Paperwork Burden
Under the cents-per-km method you do not need to keep receipts for fuel or servicing. You do need to be able to show how you calculated your work-related kilometres. The ATO accepts a reasonable estimate supported by some contemporaneous record.
Practical options for locums:
- A spreadsheet or notes app logging each work trip with the date, start point, end point, and distance.
- Calendar entries in your scheduling app that capture the workplace addresses (distances can be calculated after the fact from mapping tools).
- Odometer readings at the start and end of the financial year, cross-referenced against your shift record.
What the ATO looks for is consistency and plausibility. If your claimed kilometres align with your shift history and the driving distances between the workplaces you attended, that is a strong position to be in.
How Sessional Helps
Sessional's cents-per-km tool lets you log each workplace trip directly against the shift it belongs to. At tax time you get a clean, dated summary of your business kilometres for the year, broken down by workplace, ready to hand to your tax agent or enter into myTax. The dashboard also tracks your running total against the 5,000 km cap so you can see at a glance whether switching to the logbook method mid-year makes sense. Paired with the earnings and tax-reserve dashboard and BAS readiness tracker, it covers the full cycle from shift to deduction to lodgement. See all features on the pricing page or visit the help centre for guides specific to your profession.
If you work as a GP covering multiple sites, see the GP-specific guide for notes on provider number travel and Medicare billing across locations.