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ATO Cents Per Km Rate 2026-27: Draft 91c/km Rate
May 10, 2026 • 9 min read
Status checked June 10, 2026: the ATO has published Draft Legislative Instrument LI 2026/D12, which sets the 2026-27 cents per kilometre car deduction rate at 91 cents per kilometre for the income year commencing on July 1, 2026. It is still a draft instrument as of this check, with ATO consultation comments due by June 12, 2026. The ATO’s main cents per kilometre method page still lists 88 cents per kilometre for 2024-25 and 2025-26.
Quick Answer: ATO Cents Per Km Rate 2026-27
The draft ATO cents per kilometre rate 2026-27 is 91c per km.
That is a proposed increase from the current 88c per km rate that applies for 2024-25 and 2025-26. The 2026-27 rate is not yet shown on the ATO’s main cents per kilometre method page, but it is published in the ATO Legal Database as a draft legislative instrument.
Key numbers:
- Draft ATO cents per kilometre rate for 2026-27: 91c per km
- Current 2024-25 and 2025-26 rate: 88c per km
- Maximum cents per kilometre claim at 91c/km: $4,550 for 5,000 work-related km
- Maximum at 88c/km: $4,400 for 5,000 work-related km
- Difference at the 5,000 km cap: $150 per car
For the current published method rules, read our ATO cents per kilometre guide or use the ATO mileage calculator. If your work driving is high, compare this method with the ATO logbook method.
Start tracking your work kilometres with DriveLog so your records are ready before the 2026-27 year begins.
What the ATO Draft Instrument Says
The ATO draft instrument is titled Draft Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026.
It states that the instrument commences on July 1, 2026 and that the rate of cents per kilometre for cars for the income year commencing on that date is 91 cents per kilometre.
The accompanying ATO explanatory statement says the 91c rate is made up of:
- a base cents per kilometre rate of 89c
- a temporary one-off uplift of 2c for the 2026-27 income year
That uplift is tied to higher expected car operating costs, including fuel-price conditions and uncertainty during 2026.
Is the 91c/km Rate Final?
Not yet, based on the sources checked on June 10, 2026.
The ATO Legal Database document is still marked Draft, and the ATO open consultation page lists the draft legislative instrument with comments due by June 12, 2026. Until the final determination is registered or the ATO updates its main car-expense guidance, treat 91c/km as the draft 2026-27 rate, not a final lodged-return instruction.
Practically, though, this is stronger than a prediction. The ATO has now published the draft rate, the proposed commencement date, and the reasoning behind the increase.
88c vs 91c: Example Calculations
Here is what the draft increase would mean in real numbers.
| Work-related km | At 88c/km | At 91c/km | Difference |
|---|---|---|---|
| 1,000 km | $880 | $910 | $30 |
| 3,000 km | $2,640 | $2,730 | $90 |
| 5,000 km | $4,400 | $4,550 | $150 |
The headline rate matters, but the bigger issue is still record quality. A 91c rate does not help if you cannot show how you worked out your work-related kilometres.
Why the Draft Rate Increased to 91c/km
The draft explanatory statement says the ATO’s base 2026-27 rate is 89c/km, calculated by applying the annual indexation method to the 2025-26 rate of 88c/km.
The extra move to 91c/km comes from a temporary one-off uplift. The ATO says the uplift is intended to account for higher-than-average operating costs in the 2026-27 income year, including global conditions affecting fuel prices during the March 2026 quarter and price uncertainty ahead.
That matters because the cents per kilometre method is designed to be a simplified allowance for car running costs. Fuel, registration, servicing, maintenance, and other operating costs are already built into the rate. You do not claim those costs separately when using cents per kilometre.
How the 2026 Fuel Shock Fits In
The fuel shock is useful context, but it should not be treated as the only reason for the rate change.
In April 2026, the Australian Government announced temporary fuel relief. The Department of Infrastructure said the fuel excise paid per litre was reduced from 52.6c to 20.6c from April 1 for three months, with fuel expected to be about 32c per litre plus GST cheaper at the bowser. The heavy vehicle road user charge was also reduced to zero for the same three-month period.
The ACCC also warned fuel retailers to pass on excise cuts quickly and said it was monitoring fuel prices daily across capital cities and more than 190 regional locations. Its April 2, 2026 release noted volatile benchmark prices and concerns about fuel surcharges.
The ATO draft explanatory statement connects the 2026-27 uplift to higher operating costs and fuel-price uncertainty. That is now a firmer source than our earlier prediction.
Records You Still Need for Cents Per Kilometre
Under the ATO’s cents per kilometre method, you do not need to keep every fuel receipt for the cents per kilometre calculation itself. The rate already accounts for car running costs.
You do still need a record that shows how you worked out your work-related kilometres.
A practical record should include:
- date of the trip
- start and end points or route context
- purpose of the trip
- kilometres travelled
- whether the trip was work-related or private
This is where many claims become weak. The issue is usually not the arithmetic. It is the ability to explain the work-related kilometres months later.
Cents Per Kilometre vs Logbook Method in 2026-27
If the draft 91c/km rate is finalised, the cents per kilometre method becomes more valuable for 2026-27. But the 5,000 km cap per car still matters.
The cents per kilometre method is usually attractive when:
- you want a simpler claim
- your work-related driving is below 5,000 km per car
- you do not want to track every car expense
- your records can support a reasonable work-kilometre estimate
The logbook method may be worth considering when:
- you drive well above 5,000 work-related km
- fuel, servicing, finance, insurance, or depreciation costs are high
- your business-use percentage is strong
- you are willing to keep a representative logbook and expense records
For high-use drivers, the difference between cents per kilometre and logbook can still be larger than the 3c/km rate increase. For a deeper setup guide, see our ATO logbook method guide.
How DriveLog Helps With a 2026-27 ATO Mileage Claim
Whether you end up claiming at the 2025-26 rate of 88c/km or the draft 2026-27 rate of 91c/km, the rate only matters if your work kilometres are defensible.
DriveLog helps Australian drivers keep cleaner records by:
- capturing work trips as they happen
- separating business and personal kilometres
- keeping dates, distances, and trip purpose notes in one place
- reducing the need to rebuild records from memory at tax time
- making it easier to compare cents per kilometre with the logbook method
For the cents per kilometre method, you do not need fuel receipts for every trip, but you do need to show how you worked out your work-related kilometres. A simple, consistent trip record is the safer habit.
If fuel costs keep moving around in 2026, DriveLog also helps you see when the logbook method may be worth considering instead of the capped cents per kilometre method.
Track your work kilometres with DriveLog
Sources Checked
Core sources checked on June 10, 2026:
- ATO Draft Legislative Instrument LI 2026/D12
- ATO Draft Explanatory Statement LI 2026/D12
- ATO open consultation page
- ATO cents per kilometre method
- Department of Infrastructure fuel excise and heavy vehicle road user charge relief
- ACCC fuel excise cut and fuel-price monitoring release
FAQ: ATO Mileage Rate 2026-27
Has the ATO announced the 2026-27 mileage rate?
The ATO has published a draft 2026-27 cents per kilometre rate of 91c/km in Draft Legislative Instrument LI 2026/D12. As of June 10, 2026, it is still marked as a draft instrument.
What is the draft ATO cents per km rate for 2026-27?
The draft rate is 91 cents per kilometre for the income year commencing on July 1, 2026.
Is the 91c/km ATO rate final?
Not yet. The ATO Legal Database marks LI 2026/D12 as a draft, and the ATO consultation page lists comments due by June 12, 2026. Treat 91c/km as the draft rate until the final instrument or main ATO guidance confirms it.
Why is the draft rate 91c/km?
The ATO explanatory statement says the 91c rate is a base rate of 89c plus a temporary one-off uplift of 2c for 2026-27, reflecting higher expected car operating costs and fuel-price uncertainty.
What is the maximum cents per kilometre claim at 91c/km?
At 91c/km, the maximum cents per kilometre claim for 5,000 work-related kilometres would be $4,550 per car.
Do I still need records if I use cents per kilometre?
Yes. You do not need fuel receipts for every trip under the cents per kilometre calculation, but you need records showing how you worked out your work-related kilometres.
Should high-mileage drivers use the logbook method instead?
Possibly. If you drive more than 5,000 work-related km or your actual car costs are high, the logbook method may produce a better result, provided you keep the required records.
