You may have heard about the proposed $1,000 standard deduction for work-related expenses. If introduced, this could be a helpful change for many employees, particularly those with smaller work-related expense claims. The aim is to make tax time simpler and reduce some of the record-keeping burden for eligible taxpayers. However, it is important to understand when the change is expected to apply and how it may affect your tax return.

What is the proposed deduction?

The Government has proposed a standard deduction of up to $1,000 for eligible employees.

If this becomes law, some taxpayers may be able to claim up to $1,000 for work-related expenses without needing to provide receipts for that amount.

This may help employees who usually claim small amounts for things like:

• working from home expenses
• phone and internet use
• stationery
• uniforms or protective clothing
• small tools or equipment
• work-related travel expenses

For these taxpayers, the proposed deduction may make tax time easier from the 2027 income year.

It does not apply to the 2026 tax return

At the time of writing, the proposed $1,000 standard deduction is not yet law.

It is expected to apply from 1 July 2026, which means it would apply from the 2027 income year.

This means it does not apply to your 2026 tax return, being the year ending 30 June 2026.

You can read more about this on the ATO website: Standard deduction for work-related expenses.

Please continue to keep your records

For your 2026 tax return, the current rules still apply.

This means you should continue to keep receipts, invoices, logbooks, diary records and other documents for any work-related expenses you want to claim. This is especially important if you have claims for:

• car expenses
• travel expenses
• working from home expenses
• tools and equipment
• self-education costs
• uniforms or laundry

Until the rules are finalised and apply, it is best to continue keeping your receipts and records as usual.
You can read more about record keeping on the ATO website: Record you need to keep. 

It is not a $1,000 refund

It is also worth noting that the proposed deduction is not the same as receiving an extra $1,000 refund.

A deduction reduces your taxable income. It does not reduce your tax payable dollar for dollar.

The actual tax benefit will depend on your personal circumstances.

What if your work-related expenses are more than $1,000?

If your actual work-related expenses are more than $1,000, you may still need to claim your actual expenses under the current ATO rules, which means keeping records to support your claim. You can read more about claiming deductions on the ATO website.

For this reason, it is still a good habit to keep your receipts, especially if your work-related expenses are usually higher than $1,000.

The proposed $1,000 standard deduction may be a welcome change for many employees, but it is important to understand that it is not yet law, it is not a $1,000 refund, and it does not apply to the 2026 tax return. For now, you should continue keeping your receipts and records as usual.