Thinking about a new car through the business?
Run the same four checks we'd do with you in person, and see what it actually costs after tax.
Putting a vehicle through your business doesn't necessarily make it cheaper.
The saving comes down to your business-use percentage, tax rate, and how long the vehicle lasts. Get the structure wrong and the benefit can disappear entirely (we’re looking at you FBT, you trouble maker).
This calculator walks you through the same four things we'd sit down and work through with you: your structure, the vehicle, the cash flow, and how you'll claim it.
Two minutes of inputs, and you'll see the real after-tax number for your situation.
Buying a car through your business: the real after-tax cost
Frequently asked questions
Can I claim a car through my business?
Yes, if the vehicle is genuinely used for business. You claim the business-use percentage of the running costs, depreciation, and finance interest. The ATO expects a 12-week logbook to support anything above token use, and home-to-work commuting doesn't count as business use.
Does buying a car through the business actually save tax?
Sometimes. Your saving equals the business-use percentage multiplied by your tax rate, spread across the effective life of the vehicle. A sole trader on a 37% marginal rate using a ute 80% for work will see a meaningful saving. A company director driving a passenger car mostly for personal trips can end up worse off once FBT is factored in.
When does FBT apply to a business vehicle?
FBT applies when a company or trust provides a vehicle to a director or employee for private use. Sole traders and partnerships don't pay FBT on their own use. Utes and commercial vehicles over 1 tonne can be FBT-exempt if private use is limited to home-to-work and minor, incidental trips. Eligible electric vehicles under $91,387 are FBT-exempt for company and trust owners.
Is it better to pay cash, finance, or lease the business vehicle?
The four common options are cash, chattel mortgage, hire purchase, and finance lease. Chattel mortgage is the most common in Australia because you own the vehicle from day one and can claim GST and depreciation upfront. A finance lease treats every payment as a deduction but you don't own the asset. Cash gives the cleanest tax outcome and the heaviest cash flow hit. The right answer depends on your GST status, cash position, and how often you plan to upgrade.
What's the car limit for FY2025–26?
$69,674. That's the maximum value the ATO lets you use for depreciation and the GST credit on a passenger car. If you buy a car for $90,000, you still only get to depreciate $69,674 and claim a maximum GST credit of $6,334. Utes and commercial vehicles over 1 tonne aren't subject to the cap.