$1000 standard work-related deduction – what’s changed

From 1 July 2026, a new $1,000 standard deduction for work-related expenses is available to eligible taxpayers. This new measure allows many employees to claim a deduction without having to keep receipts or records for common work-related expenses.

What’s changed?

Under the previous rules, taxpayers could only claim work-related expenses if they:

• actually incurred the expense
• could demonstrate it was work-related
• kept appropriate records to substantiate the claim.

Now, eligible taxpayers will automatically receive a standard deduction of up to $1,000 for work-related expenses, without needing receipts or supporting documentation. Taxpayers with more than $1,000 of legitimate work-related expenses can still choose to claim their actual expenses instead.

When does it apply?

It applies from 1 July 2026, however it is important to note that it does not apply to the FY26 tax returns. It activates on 1 July 2026 (meaning FY27 is the first year it can be claimed).

Also, this standard deduction covers all work-related expenses (even motor vehicle, travel, clothing/ uniform and self-education costs, which are currently claimed in different sections of the tax return – often asked for separately to general work-related expenses).

What hasn’t changed?

The new deduction:

• is not a $1,000 cash refund
• is not a tax offset or rebate
• does not replace other deductions such as charitable donations, income protection insurance, union fees or professional association memberships
• does not prevent taxpayers from claiming actual work-related expenses where those claims exceed $1,000.

Who benefits?

The change is expected to benefit taxpayers who:

• have relatively low work-related expenses
• claim less than $1,000 each year
• prefer a simpler tax return process with less record keeping.

Key takeaway:

The biggest change is that many employees will no longer need to keep receipts for small work-related expense claims. Instead, they can access a standard deduction of up to $1,000 and enjoy a simpler tax return process.

More information: Standard deduction for work-related expenses | Australian Taxation Office

Published: 10 August 2026.