The IRD has announced the kilometre rates, also referred to as mileage rates, for the 2023-2024 income year. The rates are $1.04 for petrol, diesel, hybrid and electric vehicles for up to 14,000 km. After 14,000 km, the rates are $0.35 for diesel and petrol vehicles, $0.21 for hybrid vehicles, and $0.12 for electric vehicles. The rates set out below apply for the 2023-2024 income year for business motor vehicle expenditure claims.
| Vehicle type | Tier 1 rates (up to 14,000 km) | Tier 12rates (over 14,000 km) |
| Petrol or diesel | $1.04 | $0.35 |
| Petrol hybrid | $1.04 | $0.21 |
| Electric | $1.04 | $0.12 |
The rates have increased for all vehicle types in both Tier 1 and Tier 2 in light of changing fuel and car maintenance costs.
The IRD has a history of revising the kilometre rates and changing them every year. Since 2017, the Tier 1 rates have increased by at least two cents per kilometre every year. However, Tier 2 rates actually decreased in the 2019-2020 and 2020-2021 income years and again went up for the 2021-2022 and 2022-2023 income years due to the high fuel prices.
This year, the IRD has increased the rate for the first 14,000 km by 9 cents, the biggest increase so far. All rates for kilometres over 14,000 have increased by a cent.
Records you need to keep
You must keep a logbook of your business and personal driving to get Tier 1 reimbursement or deductions for the first 14,000 km (total). If you don’t keep records of your driving, you can only claim Tier 1 rates for the first 3,500 km of business-related driving.
Disclaimer
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