ATO Increases the Cents Per KM Rate for 2022/2023

On June 29th, 2022 the ATO published the new cents per kilometre rate for business-related kilometres for the 2022/2023 tax year. The rate increases by 6 cents per kilometre.

The ATO cents per km rate 2022/2023

The new official ATO rate is 78 cents per business kilometre.

It is common for the ATO to revise the official rate every two years to accommodate the current costs of owning and driving a car.

The rate and tax deductions

With the ATO cents per kilometre method, you can use the 2022/23 rate to claim up to 5000 business kilometres you’ve driven throughout the year. Keep in mind that you won’t be able to claim any separate expenses, as the rate per kilometre method is meant to cover all costs for owning and driving your car for business purposes.

The rate and employee reimbursement

If you receive reimbursement for business kilometres from your employer, you can expect your reimbursement to increase by a few cents. Employers are not required by the ATO to use the official rate. However, many employers recognise the increased costs of driving due to the high fuel prices and other expenses that have increased.

You can see the ATO update on their official website. If you receive reimbursement or deductions, you can read more about the rules in our ATO guide.

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How to use the cents per km 2022/2023 rate

 If you use the cents per kilometre method to claim car expenses for your business-related driving as an employee or a self-employed individual, you should use the newly revised ATO cents per km reimbursement rate for the 2022/2023 tax year, starting on July 1st, 2022.

If you are an employer, your employees will likely expect to get reimbursed based on the new ATO cents per km reimbursement rate for 2022. Keep in mind that when reimbursing your employees you are not obliged to use the standard rate. In any case, it is useful to know the cents per km rate for 2022 because anything you reimburse above it will be taxed.

How to keep track of your kilometres in 2023

Apps are your go-to. By making use of your phone's GPS, you can easily track all your trips. They also store your information and generally allow you to classify each trip as personal or business, as per the rules set down by the ATO. We've got you covered with a simple and easy-to-use logbook app whether you use Android or iOS. When using the Driversnote app, you can use the standard cents per kilometre reimbursement rate for 2022/2023 or add your own cents per km rate.

Other alternatives are keeping a paper mileage log or using a spreadsheet like Microsoft Excel or Google Sheets. Whatever you do, be sure to check out what information you need to record for your car expenses reimbursement or deductions. See our ATO mileage guide for more information.