How do sole traders claim their car at tax time, and why do most under-claim?

If your car deduction every year is a rough guess scribbled in June, you are almost certainly leaving money on the table or exposing yourself in an audit. Neither is necessary.

What are the two ways to claim a car?#

The Australian Taxation Office gives sole traders two methods for a car.

The cents per kilometre method is the simple one. For the 2025 to 2026 financial year the rate is 88 cents per kilometre, and you can claim up to 5,000 business kilometres per car. That caps the claim at 4,400 dollars per car. The rate already covers fuel, servicing, registration, insurance, and depreciation, so you do not claim those separately. You still need a reasonable record of how you worked out the kilometres.

The logbook method has no kilometre cap and usually produces a bigger deduction if you drive a lot for work. You keep a logbook for 12 continuous weeks to work out your business use percentage, then apply that percentage to your actual running costs. That logbook stays valid for five years, as long as your driving pattern does not change much.

Why do so many sole traders miss out?#

Because both methods rely on records nobody keeps in the moment. The trip to the supplier, the drive across town to quote a job, the run out to a site in another suburb. Each one is a deductible business kilometre, and each one is forgotten by the time tax comes around. What gets claimed is a conservative guess, because the ATO will not accept made up numbers and an audit needs evidence.

Remember too that your normal commute from home to a regular workplace does not count. Trips to clients, jobsites, and temporary work locations generally do. Getting that split right is exactly what a running record gives you.

What does this cost you?#

Real dollars. Take a sole trader electrician who actually drove around 4,200 business kilometres in the year. At 88 cents that is a deduction of about 3,696 dollars, which can put well over a thousand dollars back in their pocket depending on their tax rate. Guess low because you did not track it, and that money stays with the ATO. Guess high without records, and you are exposed if questioned.

What does Wild do about the logbook?#

Wild turns trip tracking into a one line message, then does the adding up and the tax-time export for you:

• Log a trip in seconds. Text logbook 45km to Frankston for the Smith job and Wild records it and tells you your running total for the week.
• See your kilometres any time. Ask for a logbook summary and Wild shows your trips and kilometres for the week and the full financial year, plus your top destinations.
• Export for tax time. Say export logbook and Wild generates a clean spreadsheet of every trip and kilometre, ready to hand to your accountant or drop into your return.
• Get a weekly nudge. A Sunday evening reminder prompts you to log anything you missed, so the record stays complete rather than reconstructed in June.

Because the record is built trip by trip as you go, you can claim with confidence instead of guessing, and you have the evidence if the ATO ever asks.

The bottom line#

Your car is one of the biggest deductions available to a sole trader, and it is the one most often under-claimed simply because the trips were never written down. Pick the method that suits how much you drive, then keep the record as you go. For 15 dollars a month, Wild logs every trip from a single text and hands you a tidy export at tax time, so your car deduction is accurate, defendable, and as large as you are honestly entitled to.