FBT and Logbooks: What the ATO Requires and How to Get it Right
If you're claiming car expenses using the operating cost method for Fringe Benefits Tax (FBT), a valid logbook is essential. Without it, the ATO will disallow your method, and you’ll likely end up with a higher FBT bill using the statutory formula.
So what does a valid logbook actually look like? And how detailed does it need to be?
Here’s what employers need to know.
When is a Logbook Required?
A logbook is required if you use the operating cost method to calculate FBT on a car fringe benefit. This method is often more favourable when the car is used mostly for business, but only if the private use percentage is properly substantiated.
Without a logbook, the ATO won’t accept a business-use estimate.
Logbook Period and Validity
The logbook must cover a continuous 12-week period
It must be representative of the car’s usual use
A valid logbook remains current for five FBT years, unless:
The car’s usage pattern changes substantially
A different car is introduced
You can start the logbook at any time during the FBT year, but make sure it is completed by 31 March if it’s your first time using the operating cost method for that car.
What the ATO Requires in the Logbook
Each entry in the logbook must record:
Date of each journey
Odometer reading at the start and end of the journey
Total kilometres travelled
Purpose of the journey (enough detail to determine whether it was business or private)
Example entry:
5 March 2025
Start: 8:00am | Odometer: 15,230
End: 10:15am | Odometer: 15,265
Distance: 35 km
Purpose: Client meeting at ABC Pty Ltd (business)
For non-business journeys, you only need to write something like “Private – weekend use”.
The ATO expects enough information to clearly distinguish between business and private use. Vague entries such as “meeting” or “travel” are not acceptable.
Additional Odometer Records Required
In addition to the trip-by-trip logbook, you must also record the odometer readings at the start and end of each FBT year (i.e. 1 April and 31 March). This is used to calculate total kilometres travelled, which is necessary for determining operating costs (e.g. depreciation).
Electronic Logbooks
The ATO accepts logbooks maintained electronically, including apps and spreadsheets, as long as they meet the same requirements. However, you should ensure:
The app calculates the journey distance correctly
The purpose of each trip is entered manually (not auto-filled or copied from prior entries)
The logbook is exportable and kept as part of your business records for five years
Common Logbook Mistakes
Here are some of the most common issues we see:
Logging fewer than 12 weeks
Forgetting to record odometer readings at the start and end of the FBT year
Failing to explain the business purpose of trips
Mixing logbook and statutory methods between years without reassessing suitability
Not updating the logbook when the car’s usage pattern changes significantly
Any of these can invalidate the logbook or result in the ATO rejecting the operating cost method.
What if You Have Multiple Cars?
Each car requires its own logbook — you cannot apply one logbook percentage to multiple vehicles. If you have a fleet, you must maintain separate records for each vehicle, unless an exemption applies (e.g. pooled cars not available for private use).
Summary: Logbook Checklist
Covers a continuous 12-week period
Includes date, odometer readings, distance, and purpose for each journey
Clearly distinguishes business vs private use
Odometer readings are recorded on 1 April and 31 March each year
Logbook is kept for five years
A new logbook is started if usage patterns change
Need Help?
We regularly assist businesses with FBT compliance, including reviewing logbook records, determining the most effective valuation method, and documenting car use properly. If you need support preparing or reviewing your logbook before the next FBT cycle, we’re here to help.
Contact us to schedule an FBT review or to request a logbook template that meets ATO requirements.
