The $1,000 standard deduction for work expenses
Updated 13 November 2026.
From the 2026–27 income year, Australian residents who earn income from work can claim a $1,000 standard deduction for work-related expenses on their tax return. You don't need to have spent the money or kept receipts. It became law in June 2026 in the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.
Who gets it
- Australian residents for tax with assessable income from work, such as wages, salary or sole trader income.
- The deduction is the lesser of $1,000 and your work income.
- Foreign residents can't claim it, and it doesn't apply to investment income on its own.
- It starts with 2026–27 tax returns, lodged from July 2027. It doesn't apply to 2025–26 returns.
Standard deduction or itemise?
If your actual work-related expenses (tools, uniforms, work travel, working from home and so on) add up to more than $1,000, claim them instead, with receipts as usual. If they're less, take the standard deduction. You can't have both: work expenses you itemise reduce the standard deduction dollar for dollar.
Deductions that aren't work expenses, such as gifts to charity and tax agent fees, are still claimed on top.
How much it's worth
The deduction lowers your taxable income by $1,000, so it's worth your marginal tax rate plus the 2% Medicare levy on that $1,000. For someone with no other deductions in 2026–27:
| Salary | Tax saved |
|---|---|
| $40,000 | $220.00 |
| $60,000 | $335.00 |
| $80,000 | $320.00 |
| $100,000 | $320.00 |
| $150,000 | $390.00 |
| $200,000 | $470.00 |
Does it change my pay?
No. Tax withheld from each pay stays the same; the saving shows up as a bigger refund, or a smaller bill, when you lodge your return. That's why the refund estimates on this site rose for 2026–27.
See your own figures in the tax refund calculator.