In Australia, an employer can grant employees an allowance for using a personal vehicle for business journeys. An example of a business journey is driving to a client’s office for a client visit.
There is a maximum amount that employers can reimburse tax-free. This maximum amount is defined by the ATO and reviewed at the start of each income year (1 July).
| 2024-25 | 88 cents per kilometre |
| 2023-24 | 85 cents per kilometre |
| 2022–23 | 78 cents per kilometre |
| 2020–21 and 2021–22 | 72 cents per kilometre |
You can pay your employees more than these maximum amounts, however, the excess will be considered taxable income. If you pay less than these amounts, the reimbursement is tax-free.
Additional notes on the mileage allowances in Australia:
- The maximum tax-free amount to be claimed per year is 5000 business kilometres per car;
- Written evidence to show how many kilometres the employee drove is not required. However, the ATO might request it to show how the business kilometres were calculated;
- The mileage rate includes all vehicle running expenses and depreciation, such as registration, fuel, servicing and insurance.
Learn how you can apply these mileage rates in your Rydoo account here.