NEW $1,000 STANDARD DEDUCTION FOR WORK-RELATED EXPENSES
The Government has introduced a new tax measure aimed at reducing paperwork and providing tax relief for Australian workers.
When does it start?
The new $1,000 Standard Deduction will apply from 1 July 2026 and will be available when preparing 2026–27 individual tax returns. It does not apply to the 2025–26 tax return.
How does it work?
Eligible Australian employees can choose to claim a standard deduction of up to $1,000 for work-related expenses instead of claiming individual expenses.
Key points
- No receipts are required if you choose the standard deduction
- The deduction reduces your taxable income – it is not a $1,000 tax refund
- You can still claim certain deductions in addition to the standard deduction, including:
-
- Donations
- Tax agent fees
- Income protection insurance
- Professional membership fees
If your actual work-related expenses exceed $1,000, you can continue to claim your actual expenses, provided you keep the required supporting records.
Our advice
The standard deduction will not be the best option for everyone. Before making a choice, compare the standard deduction with your actual work-related expenses to ensure you receive the greatest tax benefit.