What costs you can claim in your tax return (including depreciation)

Short answer:

You can claim expenses for income tax purposes as long as they are directly related to the sharing of your car, and you keep records such as receipts to back up your claims. The ATO has published a guide to the deductions you can claim for peer-to-peer car sharing.

In this article, we will look at the main costs that you may be able to claim when sharing your car.

This is general advice only, and may not be appropriate to your situation. It assumes that you are sharing your car personally and not as a business.

Find out how much you could earn by renting your car

Our commission

The gross income that you have declared as income can be reduced by our commission expenses. This is shown in the 'Trip Commission' line of your financial year summary

'Trip Commission' and 'Booking Commission' are the same thing in your summary. 


The ATO considers the useful life of a vehicle to be 8 years, starting from the date that you purchase the car (not the date it was manufactured). Using the ‘diminishing value’ method to calculate depreciation (explained below), you will depreciate the value of the car over that period at 25% per year.

Most of the tax-deductible depreciation will occur over the first 4 years or so after you buy the vehicle, but you can still claim something each year up to the end of the 8 year period.

Remember that you can only claim depreciation if you use the Logbook method. If you use the cents-per-kilometre method, depreciation is already included so you can’t claim it again.

Here’s how to work out depreciation on your car:

Depreciation is an allowance for the decline in value of a car. There are two methods for calculating depreciation on your car: diminishing value and prime cost. 

This article focuses on the diminishing value method, which works for most people - however, you should get advice from your accountant.

Depreciation is calculated from the date you bought the car, even if that was before you listed it on the platform.

To start, you’ll need a record of the purchase price and the date of purchase (including any registration transfer fees or other costs of purchasing the car).

You will depreciate a car at 25% a year. At the end of each financial year, you work out the depreciated value (the 'written-down value'). The following year, work out depreciation as 25% of that written-down value, and so on.

For example, say you bought a car for $10,000 at the start of the financial year. 

In the first year, your car has depreciated 25%, so by $2,500. 

Subtract that depreciation from the $10,000 purchase price to get $7,500 - this is the ‘written down value’ of the car.

The next year, you calculate depreciation as 25% of that written-down value (not the original $10,000 purchase price). 

This means in the second year you claim 25% of $7,500, which is $1,875 in depreciation.

Subtracting that $1,875  from $7,500 gives your car’s new written-down value of $5,625, so in year 3 your depreciation will be 25% of $5,625 - and so on afterwards.


Jill bought a second hand car on 1 July 2017 for $10,000.

Up until 30 June 2018, she used the car privately. 

On 1 July 2018 she listed it on the platform, kept a logbook, and found that her car was used 40% to earn income.

Firstly, we have to calculate the depreciation for the first year she owned it, even though it isn’t claimable.

This is $10,000 x 25% x 365/365 = $2,500

We deduct this $2,500 from the $10,000 she paid.

This equals $7,500, and is what we call the written down value of the car, at the end of 30 June 2018, just before she listed it on the platform.

We then take this written down value, which was at 30 June 2018, and work out her depreciation for the year her car was on the platform, which was the year ending 30 June 2019.

This is $7,500 x 25% x 365/365 = $1,875

The amount of depreciation she can claim is 40% of this (based on her logbook)

Meaning she can claim $1,875 x 40% = $750

If you purchased or listed a car part-way through the financial year

The calculation is based on days you owned the car in that financial year. If you only owned or shared the car for some of the days in the financial year, you can simply use that number of days in the calculation above. 

For example, Jeff listed his car in January 2018, so it was listed for 180 out of the 365 days in the 17/18 financial year. 

Assuming that Jeff has worked out his car’s written-down value at the start of the 17-18 financial year to be $7,500, and that his logbook shows that 40% of its use was by Borrowers, his calculation is:

$7,500 x 25% x 180/365 = $924.65

Can I claim the full purchase price in one year instead of claiming depreciation over time?

You can’t claim the full purchase cost of the car in one financial year (you can only claim the depreciation for that year) unless you are running your car sharing as a business, in which case different rules apply - seek professional advice if that applies to you. 

Find out how much you could earn by renting your car 

Membership fees

Any fees that you pay to list your car on the platform (that is, your monthly Sharing Plan fees) are tax deductible, whether you are using the Logbook method or the cents per kilometre method

You can find a record of these fees on your monthly invoices, or download it in your annual financial statement.

Other costs relating to a car that you own

If you are using the Logbook method, you can claim a percentage of the costs of owning and running the car.

In addition to depreciation, your costs may include:

    • Interest on a loan you have for the car
    • Insurance (if you have insurance for your car in addition to your membership)
    • Annual registration fees
    • Servicing and repair costs
    • Cleaning costs
    • Parking permit fees or payments for a dedicated parking space for your car
    • Fuel
    • Accessories you buy for your shared car (e.g. floor mats, window shades, etc)
    • Our commission (shown on your monthly and annual statements)

Recording and claiming fuel costs

    • You pay for all of the fuel that is used in your car - whether you buy it yourself, or borrowers buy it and the cost is passed on to you through your member account. 
    • You should keep receipts each time you purchase fuel for your car. 
    • The fuel that is charged to your member account will be shown on your monthly statements and in your financial year summary. 
    • To get the total fuel cost for your car, add the amount that you spent of fuel and the amount that borrowers spent on fuel.

Are there any other costs I can claim?

If there is anything you want to claim that you are unsure about or that is not listed in the ATO guide to peer-to-peer car sharing deductions, you should ask your accountant or get a private ruling from the ATO. Your income and deductions from sharing your car is more likely to be looked at than most other types of income and deductions, so err on the side of caution and don’t claim costs that you can’t substantiate.

Find out how much you could earn by renting your car

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  • Hi
    Do you know if cleaning fees expenses are incorporated in the cent per km method?

    In the pdf carnextdoor sent "2020_Car_Next_Door_How_to_Complete_your_Tax_Return_Details.pdf" it is not very clear.

    Besides I was a bit confused whether the whole section in the pdf "Expenses recorded outside Car Next Door" could be claim as part of the km per sent method until I finally found the below info from the ATO.
    I would suggest you to update your pdf :)


    "The cents per kilometre rate incorporates decline in value, registration and insurance as well as maintenance, repairs and fuel costs. You can’t add these expenses on top of the rate when calculating your deduction"

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  • No response in over a year? These information may be useful for other borrower.

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