Vehicle Expenses in NZ: Logbook, 25% Rule, Kilometre Rates
17 October 2026 · Guide · Not tax advice
Educational information only. Not tax, legal or financial advice. We are not Inland Revenue (IRD) or ACC and are not affiliated with them. Check ird.govt.nz, or ask a qualified tax agent. Last checked against official sources: October 17, 2026. Anything marked expected should be re-checked. Examples use made-up numbers. This page contains no affiliate links.
Short answer: The IRD says a vehicle used only for business can have its full running costs claimed; if it's used for both business and private trips you must allocate. It lists three ways: keep a logbook, claim 25% of running costs, or add up actual costs. A logbook is kept for at least 90 consecutive days and the result can be used for up to 3 years if business use doesn't change by more than 20%. Travelling from home to work is a personal trip.
The logbook (IRD)
Record the start date and odometer reading, the date, distance and reason for each business journey, and the end date and odometer reading. Business proportion = business distance / total distance; apply it to all vehicle costs (petrol, WOF, maintenance, repairs, insurance, parking). After 3 years, keep another 90-day logbook. Made-up example: 912 km business of 1,600 km total = 57%.
No logbook
The claim is limited to 25% of running costs, and the IRD may ask you to substantiate it.
Kilometre rates (2025-26, published 5 June 2026)
| Vehicle | Tier 1 | Tier 2 |
|---|---|---|
| Petrol | $1.20/km | 37c |
| Diesel | $1.30/km | 38c |
| Petrol hybrid | 90c | 24c |
| Electric | $1.22 | 23c |
| Per Operational Statement OS 19/04a, Tier 1 applies to the business portion of the first 14,000 km travelled in an income year and Tier 2 (running costs only) after that. The kilometre rates include depreciation, so you don't claim depreciation separately; the IRD says self-employed people using the rates don't need to consider GST. You continue with one method for as long as you own the vehicle; the operational statement says the election is made vehicle by vehicle, in the year you acquire or first use it for business, and is irrevocable. Vehicles that aren't petrol, diesel, hybrid or electric must use actual costs. |
Dates
The IRD publishes the rates after the tax year ends on 31 March, usually by May. The rates for 2026-27 are expected in 2027; none are published yet.
Related
Sole trader guide · Home office
FAQ
Do I need to record every trip with the kilometre rates? The operational statement says not all travel (business or private) needs recording, but you must be able to show whether and when the vehicle exceeds the 14,000 km.
Is the 25% a free choice? It applies when no logbook is kept.
What we could not verify
- Read in full on 17 October 2026: the IRD vehicle expenses page, the logbook page, the 5 June 2026 kilometre-rate news item, and Operational Statement OS 19/04a. That statement is the older version (its rate table is for 2018/19); the 2026 instrument was not read, so we use it only for the 14,000 km and election rules.
- The 2026-27 kilometre rates and their publication date.
- Treatment of GST on vehicle costs under the actual-cost method.
- Whether any rule in OS 19/04a has changed since 2018 (the 2026 instrument was not read).
Sources (official)
- IRD, Use a logbook — official page (read in full October 17, 2026)
- IRD, Vehicle expenses — official page (read in full October 17, 2026)
- IRD news, Kilometre rates for the 2025-2026 income year (5 June 2026) — official page (read in full October 17, 2026)
- IRD, Operational Statement OS 19/04a (older version with 2018/19 rates) — official page (read in part October 17, 2026)