The Key Change

Starting from the 2026–27 income year, you will be able to reduce your taxable income by $1,000 automatically — without needing to keep or provide receipts when you lodge your return.

Who Benefits?

• Simplified Claims: If your work-related expenses are typically under $1,000, you save time on paperwork and still get the full deduction.
• Low-to-Middle Income Earners: Roughly 75% of those benefiting earn less than $100,000, with an average tax saving of $195–$205.
• Young Professionals: Over 1.7 million workers under age 30 will see an immediate benefit.

What if My Expenses Are Higher?

Taxpayers with work-related expenses exceeding $1,000 should continue to retain receipts and claim actual expenses, as the standard deduction represents a floor rather than a cap and does not reduce any existing entitlement. This is typically relevant for teachers with classroom supply costs, tradespeople claiming tools or vehicle expenses, nurses and other health workers with uniform or self-education expenses, hybrid workers with legitimate home-office costs, and taxpayers using the logbook method for work-related vehicle use.

Certain deductions remain claimable in addition to the standard deduction, regardless of which method is used for work-related expenses: investment-related deductions, charitable donations, union and professional association fees, and income protection insurance premiums. Where an expense is already covered under a salary packaging arrangement, it cannot also be claimed under the standard deduction; the legislation specifically prevents this double benefit.

Sources & References

Australian Taxation Office: Standard deduction for work-related expenses
The Treasury (Australian Government): Cost of Living