IRD

IRD have published an update to kilometre rates to calculate the allowable expense for using your vehicle for business purposes for the 2020-2021 income year.

Tier 1 rates have reduced to reflect lower fuel, interest and maintenance costs.

Using the Tier 1 and Tier 2 rates

The Tier 1 rate is a combination of your vehicle’s fixed and running costs. Use it for the business portion of the first 14,000 kilometres travelled by the vehicle in a year. This includes private use travel.

The Tier 2 rate is for running costs only. Use it for the business portion of any travel over 14,000 kilometres in a year.

Vehicle type Tier 1 rate per km Tier 2 rate per km
Petrol or diesel 79 cents 27 cents
Petrol hybrid 79 cents 16 cents
Electric 79 cents 9 cents

 

For further information on claiming vehicle expenses see the IRD website.

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