IRD Kilometre Rates 2025–26
The current IRD kilometre rates for the 2025–26 income year (1 April 2025 – 31 March 2026):
| Vehicle type | Tier 1 (first 14,000 km) | Tier 2 (over 14,000 km) |
|---|---|---|
| Petrol or diesel | $1.04/km | $0.35/km |
| Hybrid (petrol-electric) | $0.83/km | $0.20/km |
| Electric | $0.09/km | $0.09/km |
Source: IRD (ird.govt.nz). Verify current rates before filing.
What Counts as Business Travel?
- Travel between job sites
- Travel from your home office or yard to job sites
- Trips to suppliers, merchants, or hardware stores
- Client meetings and quotes
Does NOT count: Travel between home and a fixed regular workplace (commuting). But if your home is your base of operations, travel from home to client sites is deductible.
Which Method Is Better — Km Rate or Actual Costs?
Use the km rate if your business km are relatively low and you want simple record-keeping.
Use the actual cost method if you drive a high-km or expensive vehicle — it usually gives a larger deduction but requires tracking all expenses and a 90-day logbook once every 3 years.