If you drive for Uber in Australia, your car is your biggest business asset and one of your largest tax deductions. One of the most powerful (and often misunderstood) deductions is car depreciation.
This guide explains how car depreciation works for Uber drivers in Australia, how to claim it correctly, and how it fits into the two ATO-approved methods: the Logbook Method and the Cents Per Kilometre method.
What is Car Depreciation for Uber Drivers?
Car depreciation is the decline in value of your vehicle over time. As an Uber driver, you can claim depreciation because your car is used to generate income. In simple terms; your car loses value each year and that loss is a tax deduction. Depreciation is especially valuable because it’s often one of the largest deductions available and it can significantly reduce your taxable income.
How Car Depreciation Works in Australia
The ATO allows you to claim depreciation:
Based on the cost of the vehicle
Adjusted for business use percentage
Spread over time using ATO formulas
Depreciation is usually claimed under the logbook method, not the simpler method.
Logbook Method (Best for Maximising Depreciation)
The logbook method is the most powerful way to claim car expenses.
How it works:
Keep a 12-week logbook of all trips
Calculate your business-use percentage
Apply that percentage to all car expenses
This includes:
Fuel
Insurance
Maintenance
Registration
Depreciation
Under this method, you can claim a percentage of your car’s depreciation based on business use.
Example:
Car value: $40,000
Business use: 70%
Depreciation for year: $6,000
Claimable deduction = $6,000 × 70% = $4,200
Why Do Uber Drivers Prefer This Method?
No kilometre cap
Includes depreciation
Usually results in higher deductions
If you drive a lot, this method almost always wins. If you’re a full-time Uber driver logbook is usually better.
Cents Per Kilometre Method (Simpler, but Limited)
👉 ATO Cents Per Kilometre Method
This is the simpler option.
How it works:
Claim a fixed rate per km (e.g. ~88 cents/km)
Covers ALL car costs (including depreciation)
Important rules:
Maximum 5,000 km per year per car
No need to keep receipts
No separate depreciation claim
The ATO rate already includes:
Fuel
Maintenance
Insurance
Depreciation
Example:
5,000 km × $0.88 = $4,400 deduction (max)
When to Use This Method
You drive less than 5,000 km
You want simplicity
You don’t want to track receipts
Why Depreciation Matters for Uber Drivers
Car depreciation can:
Reduce your taxable income significantly
Increase your tax refund
Reflect the true cost of using your vehicle
Other Key Tax Deductions for Uber Drivers
Car depreciation is just one piece of the puzzle.
You can also claim:
Fuel and servicing
Insurance
Registration
Uber fees and commissions
Phone bills (Phone & Data Tax Deductions in Australia)
Tolls and parking
Car cleaning
Passenger amenities
Safety equipment
👉 Uber Driver Tax Deductions List (Australia)
How to Claim GST on BAS (Important)
If you’re GST-registered (all Uber drivers must be), you can claim GST credits on your car expenses. This includes:
Fuel
Repairs
Insurance
Car purchases (up to limits)
For BAS:
You report GST collected on fares
You claim GST paid on expenses
You only claim the business-use portion.
You don’t strictly need a logbook for GST, a reasonable estimate of business use is acceptable in practice.
Simplify Everything with Accounting Samurai
Tracking depreciation, expenses, and GST manually is painful. Instead of spreadsheets, you can use Accounting Samurai:
Upload bank or card statements
Automatically categorise expenses
Generate a full Profit & Loss statement
See your deductions instantly
This makes:
Tax returns easier
BAS lodgement faster
Income tracking clearer
Especially useful if you’re using the logbook method and want to maximise deductions.
👉 Generate Your Free Profit & Loss Statement Now
Car depreciation is one of the most powerful tax tools for Uber drivers in Australia but only if you use the right method.
Key takeaway:
Use logbook method to maximise deductions
Use cents per km for simplicity
Track everything properly
And most importantly; don’t leave your biggest deduction on the table.
