Kilometre Rates
Every year Inland Revenue publishes kilometre rates that customers can use to calculate the business use of motor vehicles. These kilometre rates represent the average cost of operating a motor vehicle based on industry figures.
The Commissioner has published two operational statements explaining how to use the annual kilometre rates to calculate:
- the business portion of motor vehicle costs for deductibility; or
- the tax-exempt portion of an employee reimbursing payment where the employee uses their private motor vehicle in the employer’s business.
OS 19/04a: Commissioner's statement on using a kilometre rate for business running of a motor vehicle - deductions
This statement sets out how to calculate the business use of a motor vehicle using the kilometre rate method.
OS 19/04b: Commissioner's statement on using a kilometre rate for employee reimbursement of a motor vehicle
This statement explains how to calculate the tax-exempt portion of an employee reimbursing payment using the kilometre rate method where the employee uses their private motor vehicle in the employer’s business.
Annual rates