Can You Claim Car Expenses on a Novated Lease (Partial Year)?

Can we claim car expenses on Novated Lease if I had it for partial year?

Yes, you can claim car expenses—but only for the period you didn't have Novated lease.
Here’s how it breaks down:
First Half of the Year (Novated Lease)

• You cannot claim running costs or use the cents/km method.
• The car was leased by your employer, and expenses were paid through salary sacrifice.
• These costs are typically claimed by your employer.

Once the Novated lease is expired or cancelled

• You can claim car expenses using the cents per kilometre method.
• You’re allowed to claim up to 5,000 km per car per financial year.
• For 2025–26, the rate is 88 cents/km, so the max claim is $4,400.
• No receipts needed, but you must keep a record of your work-related travel (e.g., diary or ATO app).

Even though you only used your own car for part of the year, the ATO still allows you to claim up to 5,000 km if the travel was work-related and you weren’t reimbursed.

Tip: Switching jobs or vehicles mid-year doesn’t limit your claims if the car is yours and the travel is for work, you’re good to go.