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Australia's sole traders missing out on up to $608 million in road-related tax deductions

Rounded

Key Facts:

• Australia's sole traders could collectively be missing out on up to $608 million in unclaimed road-related tax deductions, with each eligible sole trader potentially losing more than $1,100 in savings at tax time.
• The money back at tax time for modest income sole traders is worth more than double the fuel bill based on today's average petrol prices.
• The Australian Tax Office (ATO) offers sole traders 88 cents per kilometre for work-related driving, up to 5,000 km per year, requiring no receipts — only a record of trips taken.
• Australian accounting software specialist Rounded has launched 'Trax', an app that automatically tracks work-related driving using Bluetooth or CarPlay, requiring no manual input from the driver.
• Trax generates an ATO-compliant logbook at the end of the financial year, supports both the cents-per-kilometre and logbook methods, and surfaces whichever will provide the higher deduction.

Australia's sole traders missing out on up to $608 million in road-related tax deductions 

 

Sole traders who drive for work could each be saving more than $1,000 at tax time

 

Rounded launches ‘Trax’ giving Australia's sole traders an automated way to claim up to $4,400 a year each in work-related driving deductions 

 

MELBOURNE, Wednesday 24 June 2026: Australia’s sole traders could be collectively missing out on as much as $608 million¹ in unclaimed road-related tax deductions this year. Sole traders who drive for work and fail to claim could be losing out on a $1,126² saving at tax time – a missed opportunity for Australia’s army of close to a million³ mobile dog groomers, travelling physios, tradies, and consultants who rely on their vehicles for work.

 

Launched today, ‘Trax’ from Australian sole trader accounting and business software specialist, Rounded, puts the ATO's 88 cents per kilometre deduction, worth up to $4,400⁴ a year in tax deductions, within reach of every sole trader who drives for work.

 

"Fuel prices can really hit people who drive for a living hard," said Oliver Garside, co-founder of Rounded. "What Trax does is make sure that pain is at least partially offset at tax time, and that the kilometres you drove this week aren't just a cost, but a claim. We built what our customers asked for. They drive. Trax does the rest."

 

How it works & why it matters

The ATO offers sole traders 88 cents for every kilometre they drive for work, up to 5,000 km per year. No receipts required. No paperwork. Just a record of the trips. 

 

A sole trader earning between $45,001 and $135,000 a year and driving a modest 77km a week (4,000 kilometres a year) for work would be entitled to a $3,520 deduction and $1,126 back at tax time. Based on average fuel consumption of 8 litres per 100km, at today’s average Melbourne pump price of 158.9 c/L⁵ per litre, those same 4,000 kilometres cost approximately $508 in petrol to drive.⁶ The money back at tax time is worth more than double the fuel bill. Many sole traders never claim a cent of it. 

Taking just 30 seconds to set up, the Trax app connects to vehicles via Bluetooth or CarPlay. Once connected, it captures the date, time, distance and full GPS route of every trip without interrupting navigation, music or calls. At the end of the financial year, a single export produces an ATO-compliant PDF or spreadsheet containing everything the ATO requires, ready to hand to an accountant or attach to a tax return.

For sole traders already using Rounded, the integration goes further. Every kilometre tracked in Trax flows directly into Rounded in realtime, updating the running tax deduction automatically as each trip is completed. 

Trax supports both the cents-per-kilometre and logbook methods, and at tax time surfaces whichever will provide the higher deduction. "Every existing solution in this space asks the driver to do something: install hardware, open an app or remember to start or stop a trip," said Grant McCall, co-founder of Rounded. "We spent a long time watching people try those tools and give up because tracking was inaccurate and the data couldn't be trusted. 

“Trax asks the driver to do nothing. It uses your car's Bluetooth or CarPlay connection to know when you're driving, logs the full GPS route automatically, and produces an ATO-compliant logbook without a single tap. After ten years of making tax simple for sole traders, we know how important trust and ease of use are when it comes to accounting, which are the two pillars Trax is built on.”

 

Trax is available to download here on iOS in the App Store, with Android to follow shortly⁷. Full features and pricing are available at trax.rounded.com.au.

 

- ends -

Notes to editors:

Click here for imagery, and here for the full Trax press kit.

To explore the story further and create your own data points, use the Trax data companion, here.

1. Modelled collective unclaimed deduction estimates ($253 million–$608 million) These are Rounded's modelled estimates, using the following methodology:

• Mobile sole trader population: 1.5 million × 60% = 900,000. The 60% is a conservative professional estimate based on the occupational profile of Australia's sole trader population, which is heavily weighted toward mobile, service-based industries including trades, construction, healthcare, professional services, delivery and real estate. Full methodology available on request.

• Per-person unclaimed saving: 4,000 km × $0.88 = $3,520 deduction × 32% = $1,126 per non-claiming sole trader.

• Range: Four non-claiming rate scenarios:

 

2. Deduction and tax saving calculations 4,000 km × $0.88 = $3,520 deduction. At a 32% effective marginal rate (30% income tax plus 2% Medicare levy, applicable to taxable income between $45,001 and $135,000), the tax saving is $1,126. The same 4,000 km baseline is used consistently throughout this release for both the illustrative example and the collective modelling in Note 1. Individual results will vary based on kilometres driven, income level and marginal tax rate. Source: ato.gov.au 

3. Sole trader population The 1.5 million figure reflects the broader sole trader population including non-GST-registered ABN holders. ABS data for June 2025 records 822,873 registered sole proprietors as an active business structure; the wider population including contractors and non-GST-registered operators exceeds 1.5 million. Mobile sole trader population: 1.5 million × 60% = 900,000. The 60% is a conservative professional estimate based on the occupational profile of Australia's sole trader population, which is heavily weighted toward mobile, service-based industries including trades, construction, healthcare, professional services, delivery and real estate. Source: ABS Counts of Australian Businesses Including Entries and Exits, July 2021–June 2025, August 2025; Australian Small Business and Family Enterprise Ombudsman.

4. ATO cents-per-kilometre rate The ATO rate for work-related driving in 2025–26 is 88 cents per kilometre, applicable to passenger vehicles carrying fewer than nine passengers and less than one tonne. Maximum claimable distance: 5,000 km per vehicle per year. Maximum deduction: $4,400. No receipts required; the driver must be able to demonstrate how business kilometres were calculated. Source: ato.gov.au

5. Fuel Price: 158.9 c/L Melbourne city avg price for U91, correct on June 24, 2026. Source: https://fuelradar.com.au/fuel-prices/melbourne 

6. Fuel cost comparison The fuel cost figure of approximately $508 is calculated on the basis of average consumption of 8 litres per 100 kilometres across 4,000 kilometres, at the Melbourne average retail petrol price of 158.9 c/L at the time of publication (8L ÷ 100 × 4,000 × $1.589 = $508.48, rounded to $508). Fuel consumption will vary by vehicle type — smaller passenger cars typically consume 6–7L/100km; SUVs and light commercials 10–12L/100km — meaning the actual fuel cost for any individual sole trader may be higher or lower than the figure stated. The comparison is intended as illustrative. In this release, the $508 fuel cost is compared against the tax saving of $1,126 — not the deduction value of $3,520 — as the tax saving represents the actual cash return to the sole trader. At a 32% effective marginal rate, the tax saving is approximately 2.2 times the cost of the fuel used to drive those kilometres, referred to in this release as "more than double the fuel bill." 

7. Trax app Available on iOS:  Android support in development. Uses Bluetooth or CarPlay to detect vehicle use. No additional hardware required. Data stored on-device and synced to an Australian AWS region with end-to-end encryption. Supports both the cents-per-kilometre and logbook methods. Full features and pricing: trax.rounded.com.au.

About us:

Rounded is Australia's accounting platform built for sole traders. Since its founding in 2015, it has helped over 13,000thousands Australian sole traders manage invoicing, expenses, BAS lodgements and EOFY tax in one place, with 2 million invoices raised on the platform totalling $2.4 billion AUD.with more than $500 million processed through the platform to date. Trax is the first in a new generation of Rounded products expanding beyond accounting to address the everyday financial challenges of working for yourself.

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