Tier 1: $0.99/km (first 14,000 km). Tier 2: $0.29/km (above 14,000 km).
As recorded in your vehicle logbook.
Fuel, insurance, registration, WoF, servicing, depreciation, etc.
IRD Kilometre Rate
$7,920.00
Recommended
Actual Cost Method
$7,200.00
IRD kilometre rate method saves you $720.00 more in deductions.
How does the IRD kilometre rate method work?
IRD allows you to claim a set rate per business kilometre. For 2025, the Tier 1 rate is $0.99/km for the first 14,000 km, then the Tier 2 rate of $0.29/km applies for all additional kilometres. You need to keep a record of your business kilometres but do not need to track individual expenses.
How does the actual cost method work?
You keep a logbook for a minimum 90-day representative period to establish your business-use percentage. You then apply this percentage to all actual vehicle expenses including fuel, insurance, registration, WoF, servicing, repairs, and depreciation. You must keep receipts for all expenses claimed.
Which method is better?
The IRD kilometre rate is simpler and often better for moderate business use with fewer km. The actual cost method tends to be better for high-expense vehicles or when you drive significantly more than 14,000 business km per year and have high running costs.
IRD-Aligned: The IRD kilometre rate of $0.99/km (Tier 1) is for the 2025 income year. Commuting from home to your regular workplace is not deductible. Travel between workplaces or to client sites generally is.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms
Related Calculators
Salary Calculator
Calculate your NZ take-home pay after PAYE, ACC levy, KiwiSaver, and student loan.
GST Calculator
Add or remove NZ 15% GST. Calculate inclusive and exclusive amounts instantly.
Self-Employed Tax Calculator
Calculate your total tax liability as a self-employed individual with IRD.
Sole Trader Tax Calculator
Calculate income tax, ACC levies, and GST for NZ sole traders.