Buying a car

Exempt Vehicles (not designed principally to carry passengers)

If your business buys an exempt vehicle eg van, ute (if dual cab ute the payload MUST be greater than 1 tonne to qualify) and satisfies certain conditions you do not apply the depreciation or GST limits, rather you claim the full amount

If your employees use these cars and their private use is minor, infrequent and irregular then there will be no fringe benefits payable. Trips to & from home are normally private (unless carrying heavy / bulky goods or tools) but they are excluded for this purpose if driving an exempt vehicle

Example:
You buy an exempt vehicle for $75,000 including GST of $6,818
Private use is minor, infrequent and irregular
Depreciation claimable is $68,182 ($75,000 - $6,818)
GST claimable $6,818

Non-exempt Cars

If your business buys a non-exempt car (eg sedan, SUV, dual cab ute with payload under 1 tonne) depreciation is limited to $64,741 and GST claimable is limited to $5,885 (2022-23 rates)

Depreciation is limited to $68,108 and GST claimable is limited to $6,191 (2023-24 rates) ATO link

You will be required to pay fringe benefits tax on car benefits (i.e. private use) which are provided to employees (new exemptions apply for electric cars). Car benefits provided to directors can be offset against director loan accounts

We recomment you prepare a log book as high business use will reduce the fringe benefit

Example:
You buy a car for $75,000 including GST of $6,818

Log book % = 90%
Depreciation claimable is 90% x $64,741 = $58,267
GST claimable is 90% x $5,885 = $5,296