Claiming Vehicle Expenses in Australia: How One Uber Driver Unlocked $5,675 in Tax Savings

Claiming Vehicle Expenses in Australia: How One Uber Driver Unlocked $5,675 in Tax Savings

Sole Trader Tax Tips for 2025

Confused by Vehicle Deductions on Your Tax Return? You’re Not Alone.

Whether you drive full-time for Uber or just use your car to visit clients, shoot YouTube content, or run business errands—vehicle expenses are one of the most misunderstood deductions among Australian sole traders.

The ATO offers two methods to claim car costs, but both come with trade-offs. In this post, I’ll show you:

  • The difference between the “cents-per-kilometre” shortcut and the logbook method
  • How one Sydney driver increased his tax deduction by $16,940
  • Step-by-step guidance to track your vehicle use
  • Where to enter everything in myTax
  • Bonus: FREE ATO-compliant logbook download

Meet John: Sydney Rideshare Driver

John drives for Uber and Menulog, clocking roughly 900 km per week behind the wheel.

His car costs—including fuel, servicing, rego, insurance and tyres—add up to about $432 per week. That’s $22,464 per year.

Since this is John’s only vehicle, he uses it for both personal and business purposes. And like most sole traders, he thought the ATO’s shortcut was his only option.

Method 1: ATO’s Shortcut (Cents per Kilometre)

The ATO lets you claim up to 5,000 km per year at $0.88 per km, without needing any records.

  • 5,000 × $0.88 = $4,400 tax deduction
  • If John’s tax rate is 33.5%, he saves $1,474

Quick, simple—but capped. Even if you drive 40,000 km, you still only claim 5,000.

Method 2: Logbook Method (The Power Move)

John switches to the logbook method. He uses the Driversnote app to track all trips—business and personal—for 12 weeks.

Results:

  • Total km: 11,340
  • Business km: 10,800
  • Business-use %: 10,800 ÷ 11,340 = 95%

Now he can claim 95% of his actual car costs:

  • $22,464 × 95% = $21,340 tax deduction
  • Tax saved: $21,340 × 33.5% = $7,149

💰 Difference: $7,149 – $1,474 = $5,675 in extra tax savings

Not a Rideshare Driver? Here's Why This Still Matters

Even if you only use your car occasionally for business—say, driving to shoots, visiting clients, or dropping off supplies—the logbook method can work for you.

  • You only need to track for 12 weeks
  • That usage % stays valid for up to 5 years
  • You’ll only claim the portion related to your business use

How to Track Vehicle Use (and Make It Easy)

Recommended Tools:

✅ Keep a copy digitally or print it—just make sure it’s complete and stored safely in case of audit.

Where to Enter Vehicle Expenses in myTax

When lodging your tax return as a sole trader:

  1. Go to Business/Sole Trader and Partnership Income
  2. Click Add/Edit
  3. Under Expenses, enter total car costs: $22,464
  4. myTax will automatically apply your business-use % (e.g. 95%)

Watch: Video Walkthrough & Real-Life Example

Want to see the full breakdown, calculations, and live walkthrough?

🎬 Claiming Vehicle Expenses as an Uber & Sole Trader in Australia – Tax Tips for 2025

Ready to Get Started?

✅ Download your free ATO logbook template
✅ Track your trips easily with Driversnote
✅ Snap receipts using Xero to stay audit-proof


If you want help building your claim, understanding GST on car expenses, or completing the sole trader section of your tax return—check out my other guides and videos. And don’t forget to subscribe for more Money with Dan tips!