Updated for the 2025–26 income year, with 2026–27 changes noted. Reviewed 19 October 2026.
From the 2026–27 income year, eligible employees automatically receive a standard deduction of up to $1,000 for work-related expenses, without needing receipts. It doesn't apply to 2025–26 returns. Here's who gets it, which claims reduce it, and how to decide whether to claim your actual expenses.
Who is eligible
- Australian resident individuals.
- With assessable labour income: salary and wages, director fees, parental leave pay and similar.
- Not available if you only have business, dividend or other non-labour income.
- Maximum is the lower of $1,000 and your labour income.
Claims that reduce it
- Work-related expenses such as stationery, tolls, travel allowance expenses, uniforms, laundry and working from home.
- Work-related car expenses and transport between separate workplaces.
- Balancing adjustments on work assets.
- Each dollar of these that you claim reduces the standard deduction by a dollar.
Claims that don't reduce it
- Union fees and professional association memberships.
- Gifts and donations, tax agent fees, investment and rental deductions, and personal super contributions.
Record-keeping changes from 2026–27
Alongside the standard deduction, the old exceptions that let you claim up to $300 of work expenses or $150 of laundry without written evidence are removed. If you claim actual expenses, you need records.
Worked example
Example (illustrative figures only – not real client data): Yasmin is an employee. In 2026–27 she has $400 of working from home expenses, a $200 training course, $350 of union fees and a $100 donation.
| Expense (example figures) | Deduction |
|---|---|
| Standard deduction ($1,000 less $0 claimed covered expenses) | $1,000 |
| Union fees (claimed on top) | $350 |
| Donation | $100 |
| Total deductions | $1,450 |
If she instead claimed her $600 of working from home and training costs, her standard deduction would fall to $400 and her total would be the same, but with more paperwork. If her covered expenses were over $1,000, claiming them with records would give a bigger deduction.
Checklist
- Add up covered work expenses during the year.
- If they'll clearly exceed $1,000, keep full records.
- Keep union and membership statements either way.
Common mistakes to avoid
- Claiming small covered expenses and reducing the standard deduction for no benefit.
- Assuming the standard deduction applies to 2025–26.
- Not keeping records when expenses exceed $1,000.
Record-keeping tips
- Keep receipts for any expense you intend to claim.
- Records stay required for donations, tax agent fees and investment deductions.
When to see an accountant
Get personal advice from a registered tax agent if:
- you have both employee and business income;
- your work expenses are close to $1,000;
- you have an ABN, side business or rental property as well as your job;
- you have received an ATO letter, review or amended assessment.
Related guides
ATO sources for this guide
- ATO: Standard deduction for work-related expenses
- ATO: Records you need to keep
- ATO: Copyright notice
This guide is written in our own words. It draws on information published by the Australian Taxation Office, and some short phrases are quoted with attribution. Source material: © Australian Taxation Office for the Commonwealth of Australia. Top Accountants is not endorsed by, or affiliated with, the ATO.
Frequently asked questions
Can I use the standard deduction in my 2025–26 return?
No. It first applies to 2026–27 returns.
Do union fees reduce the standard deduction?
No. Union fees and professional memberships can be claimed on top.
Do I need receipts for the standard deduction?
No. It's applied automatically if you're eligible.