Can I claim parking on tax? A guide to eligible expenses and savings

Quick facts

• You can claim parking on your tax return if you are using it for work purposes.
• Eligible parking expenses are for business trips, visiting clients or suppliers and commuting to different work locations.
• The amount you can claim varies depending on the vehicle and duration of the trip.
• Keep records and receipts for your claims in case of an audit.

As a working individual it’s good to know your eligible expenses and savings on tax. One area that many people are unsure about is claiming parking expenses. Can I claim parking on my tax?

Eligibility to Claim Car Expenses on Your Tax Return

To claim car expenses on your tax return you need to use your personal vehicle for work purposes. Eligible expenses are running costs like fuel, maintenance and insurance. You need to accurately justify the percentage of work use you are claiming. Keeping a detailed logbook of your kilometres travelled and their work related purposes will help support your claim. This detailed record will help you claim your car expenses accurately.

Types of Parking Expenses You Can Claim

• Work related parking fees are tax deductible.
• You can claim parking fees as a travel expense not as a car expense.
• You can also claim work related bridge and road tolls as a travel expense.
• Parking costs incurred on a work journey, such as parking at a client, supplier or alternative work location are eligible for a deduction.

How to Claim Parking Expenses

Claiming parking expenses on your tax return is easy if you follow the right steps. Here’s a step by step guide to help you claim your parking expenses:

Step by Step Guide

1. Keep records: Start by keeping a logbook or a record of your parking expenses. Note down the date, time, location and amount spent on parking. You can use a parking logbook app or a simple spreadsheet to make this easier.
2. Work related parking costs: Determine which parking costs are work related. This includes parking fees incurred while visiting clients, suppliers or alternative work locations.
3. Total parking costs: Add up all the work related parking costs for the financial year. Make sure you include every parking fee to maximise your tax deduction.
4. Have you been reimbursed: Check if your employer has reimbursed you for any of the parking costs. If you have been reimbursed you can’t claim those costs as a tax deduction.
5. Claim the parking expenses on your tax return: When you lodge your tax return claim the total parking costs as a tax deduction. You can do this under the “Travel and Car Parking” section of your tax return.

By following these steps you can claim your parking expenses accurately and save on your tax return.

Common Mistakes to Watch Out For

1. Claiming private parking expenses: Make sure you only claim work related parking expenses. Parking costs incurred while commuting to and from work or for personal use are not claimable.
2. Not keeping records: Failing to keep detailed records of your parking expenses can cause delays or even rejection of your tax return. Always keep a logbook or digital record.
3. Claiming reimbursed expenses: Don’t claim parking expenses that have been reimbursed by your employer. Only out of pocket expenses are eligible for a tax deduction.
4. Not meeting the eligibility criteria: Make sure you meet the eligibility criteria for claiming parking expenses as a tax deduction. This includes ensuring the parking costs are work related and you have not been reimbursed.
5. Not seeking professional advice: If you are unsure about claiming parking expenses or have a complex tax situation seek professional advice from a tax accountant or advisor.

By following these steps and avoiding common mistakes you can claim your parking expenses correctly and maximise your tax deductions.

How to Calculate Your Tax Deductible Car Expenses

• There are two methods to calculate your tax deductible car expenses: the ‘cents per kilometre’ method and the logbook method.
• You must be able to show how you have calculated the percentage of work use you are claiming.

The Logbook Method

• The logbook method requires you to record your kilometres travelled and work purposes in a logbook.
• You use the logbook method if you are going to claim car expenses for more than 5,000 kilometres of business travel in any financial year.
• You must be able to show how you have calculated the percentage of work use you claim.

The Cents Per Kilometre Method

• The cents per kilometre method applies a flat rate per kilometre up to 5,000 kilometres.
• The rate for this financial year is 85 cents for the 2024 financial year.
• You must show how you have calculated the kilometres you claim.

Parking Fees and Tax Deductions

Parking fees are work related expenses and can be claimed as tax deductions. These are travel expenses not car expenses. You can also claim tolls for bridges and roads incurred during work related travel.

How to Maximise Your Car Parking Tax Deductions

To get the most out of your tax deductions you need to keep accurate records and follow the ATO rules. Make sure you record where you parked and why as the ATO will scrutinise your expenses.

What Records Do You Need to Keep for Car Tax Deductions?

You need to keep records of your car expenses to manage your finances. This includes not just receipts for fuel, maintenance and repairs but also a logbook.

In the logbook you should record the date, purpose of each trip, kilometres and any other relevant information so you can track your spending and prepare for tax deductions if applicable. Keeping these records organised will give you a better picture of your overall vehicle costs and help you budget for future expenses.

You need to keep these records for at least 5 years after you lodge your tax return.

Parking Expenses You Can’t Claim

Parking at your regular place of work or as part of your daily commute is a private expense and not claimable under tax. This means any costs incurred for parking at your workplace, whether in a private car park or on the street, cannot be deducted from your taxable income.

Also if you use your car for both private and work purposes you can’t claim the total car expenses. You can only claim the portion of your car expenses that is directly related to your work activities as a tax deduction.

You need to keep detailed records of your trips and expenses to support your claims and comply with tax laws.

Common Situations to Claim Car Parking Expenses

• You can claim airport parking if it’s work related and you have proof of the expense.
• You can claim parking fees for work related trips, such as parking at a client, supplier or alternative place of work.
• You can claim parking costs incurred on a work journey, such as parking at a conference or meeting.

Summary

To claim parking expenses on your tax return you need to meet certain eligibility and keep accurate records.

You can claim work related parking fees as a travel expense not as a car expense.

By using the logbook method or the cents per kilometre method you can maximise your car tax deductions and save on your tax.

FAQ

How much parking can you claim on tax without receipts?

• Generally you need to keep receipts or other written records for expenses to claim them on your tax return.
• But if the expense is under $10 and it’s impractical to get a receipt you may still be able to claim it as a deduction.

Can I claim parking fees as part of my daily commute?

• No, parking fees for your daily commute are private expenses and can’t be claimed on your tax return.

Can I claim parking costs if I use my car for both work and personal purposes?

• Yes, but only the work related portion can be claimed on your tax return. You must

What car expenses?

• In addition to parking fees you can also claim other car expenses related to work such as fuel, maintenance and repairs, insurance and depreciation. But these expenses must also meet eligibility and be supported by records.

What if my employer pays me back for parking fees?

• If your employer has paid you back for any work related parking costs then you can’t claim them on your tax return. The payment is non-taxable income. But if the payment is less than the actual expense incurred you may be able to claim the difference as a deduction.

Need help with accounting, bookkeeping or taxes? Mahler Advisory can help! Click the call button or book an online appointment with us.

Remember this is general advice. Talk to a specialist who knows your situation. This information is current at the time of publication but may change.

Tax laws change so make sure you stay up to date with what you owe. The Australian Taxation Office (ATO) is the best source for the latest details on tax rules and requirements in Australia.