From 2026–27, Australian residents who earn wages or salary get a standard deduction of up to $1,000 for work-related expenses, applied automatically when they lodge. They do not have to spend the money or keep records. Claiming actual expenses instead only gives more tax back if those expenses are more than $1,000, and then every one of them needs written evidence. The decision is best made at the start of the year, because that is when the records start.
Pick the closest job to load typical figures, then change them to suit. Figures are illustrative.
Records can’t be rebuilt at tax time, so decide at the start of the year.
From 1 July 2026, anyone who claims work-related expenses needs written evidence for all of them. If you might claim more than $1,000 for 2026–27, the records have to be kept as you go: timesheets for hours at home, a diary of work kilometres, receipts for every purchase. If you won’t get past $1,000, you can stop keeping work receipts altogether.
Take the standard deduction. No work receipts needed.
The extra tax back is small: $300 over the line is worth about $90 at 30%.
Keep records for the first few months and see where you are heading. If it is close, the $1,000 is usually the easier choice.
Keep full records from 1 July and claim.
Once you claim more than the standard deduction, every work-related expense needs written evidence, not only the amount above $1,000. The old $300 no-receipts allowance and the $150 laundry allowance are gone. In our view, claims above the standard deduction will also stand out: when most workers take an automatic $1,000, the ATO’s review and data-matching attention is likely to focus on those who claim more. Only go over if the extra tax back is worth the records and you would be comfortable producing them.
| If you claim | Keep from 1 July |
|---|---|
| Working from home (70 cents an hour) | A record of every hour worked at home, such as timesheets, a roster or a diary kept at the time, plus one bill for each running expense (electricity, phone, internet). |
| Car (91 cents a kilometre) | A diary of work trips: date, destination, purpose and kilometres. Home to a regular workplace does not count. |
| Tools, equipment, uniforms, training | Receipts or invoices, and a note of how each item relates to your work. Equipment also used privately needs a work-use percentage. |
| Laundry | A note of the number of work-only loads ($1 each) or mixed loads (50 cents each). |
| Union or professional fees | The statement of fees paid. Claimed under either option. |
Who gets it. Australian residents for tax purposes who earn assessable labour income: salary and wages, director fees and office holder payments, payments to religious practitioners, return-to-work payments, termination and retirement payments, and parental leave pay. It does not apply if your only income is from investments or a business.
How much. The lower of $1,000 and your labour income. Someone with $400 of casual wages and $40,000 of dividends gets $400.
How you get it. Nothing to do. The ATO applies it in your return automatically. It is a deduction, not an offset, so it reduces your taxable income: worth $150 to someone on the 15% rate, $300 on 30%, $370 on 37% and $450 on 45%, plus Medicare levy.
What reduces it. Any deduction you claim for costs of earning your labour income: working from home, car expenses under either the cents per kilometre or logbook method, travel between workplaces, fares, parking and tolls, work travel accommodation and meals, tools and equipment (including repairs and decline in value), uniforms, protective gear and laundry, phone and internet, training and self-education, books, journals, software and subscriptions, and licence, registration or practising certificate fees. Each dollar claimed reduces the standard deduction by a dollar, but not below zero. So claiming $550 leaves a $450 standard deduction and the total is still $1,000; claiming $1,800 leaves none and the total is $1,800.
What does not reduce it. Union fees and memberships of a trade, business or professional association, and income protection, sickness and accident insurance premiums, to the extent they are deductible. Donations, tax agent fees, investment and rental costs, personal super contributions and business expenses are also claimed on top. Where a cost is partly for a business and partly for a job, only the job share reduces the standard deduction.
Membership or registration? A professional association membership sits outside the $1,000. A licence, registration or practising certificate needed for your job is not a membership and generally reduces the standard deduction. Nurses’ and teachers’ registration fees are common examples.
Claiming expenses below $1,000 gives exactly the same deduction as claiming nothing, with more paperwork and more audit risk. Claiming only helps if your work-related expenses are more than $1,000, and then it helps by the amount above $1,000 at your marginal rate.
The old shortcuts end for everyone, whether or not they take the standard deduction:
If your work costs are clearly under $1,000, stop keeping work receipts and take the standard deduction. If they could exceed $1,000, for example a work car, regular travel between sites, expensive tools or a lot of working from home, keep full records from 1 July and decide when you lodge.
From the 2026–27 income year, so it first appears in tax returns lodged from 1 July 2027. It does not apply to 2025–26 returns.
No. The standard deduction is applied automatically if you earn salary or wages. You do not need to have spent the money or kept records.
Only if they are more than $1,000 and you have written evidence for all of them. Below $1,000, claiming gives the same total deduction as taking the standard deduction.
Yes. Union fees and trade, business or professional association memberships, donations, the cost of managing your tax affairs, investment and rental costs, personal super contributions and deductible income protection premiums are claimed as usual and do not reduce the standard deduction. Licence, registration and practising certificate fees are different: they generally do reduce it.
No. Car expenses for work, whether cents per kilometre or logbook, reduce the standard deduction dollar for dollar. A $455 car claim leaves a $545 standard deduction. You still need a reasonable basis for the kilometres claimed.
Only to salary, wages, director fees and other labour income. Business income does not count, and business expenses are claimed in the usual way. A business owner who is also paid a wage or director fee gets the standard deduction on that labour income.
The ATO has not said so directly, but in our view it is likely. Claims above the standard deduction need written evidence for every work-related expense, and with most workers taking the automatic $1,000, larger claims will be easier to spot. Only claim more if the extra tax back is worth the records.
At the start of the income year. Records such as hours worked at home and work kilometres have to be kept as you go and cannot be rebuilt at tax time. If you might go over $1,000, keep them from 1 July; if you are clearly under, you can stop.
No. It reduces taxable income, so it is worth $1,000 multiplied by your tax rate: $150, $300, $370 or $450 depending on your bracket, plus Medicare levy for most people.
Law from 1 July 2027. Split your gain at 30 June 2027, compare a valuation with the Government formula and see the tax against the old rules.
Model your gain → TrustsProposed from 1 July 2028. Build your family group, compare a wage with distributions and test the opt-out election.
Model your family group → ReadBoth changes explained in one place, with a worked case study, the options for each trust and short answers to client questions.
Read it → WorkersFrom 2026–27, an automatic deduction with no receipts. See whether claiming your own expenses would give you more back.
Check your options → CarsThe 12-week rule, what each trip needs, where logbooks fail, and whether a logbook beats 91 cents a kilometre.
Read and compare → TalkBring your summary to a consultation with a Porters CA Chartered Accountant in South Perth or Albany.
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