Logbook method (operating cost method)

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GlossaryUpdated 10 July 2026

The logbook method, formally the operating cost method, works out the FBT taxable value of a car from its actual running costs multiplied by the private-use percentage established by a twelve-week logbook.

A valid logbook covers a continuous, representative twelve weeks, records each business trip with its odometer readings and a specific purpose, and then holds for up to five years. Running costs include fuel, servicing, registration and insurance, plus deemed depreciation and interest for owned cars or the lease charges for leased ones.

High business use can make this method much cheaper than the statutory formula. The catch is keeping a valid logbook and classifying trips correctly. Telematics can make that easier.

Last updated 10 July 2026General information, not tax or legal advice.

Related terms

Keep reading.

Neighbouring terms from the fleet glossary.

Fringe benefits taxFringe benefits tax is the tax an employer pays when a work car is available for an employee's private use, calculated on the car's value or its running costs and paid by the employer, not the driver.FBT
Statutory formula methodThe statutory formula method works out the FBT taxable value of a car as a flat 20 percent of its base value, scaled by the days it was available for private use, regardless of how far it was actually driven.

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