The $1,000 instant work deduction
From the 2026-27 income year the ATO applies a standard work-related deduction of up to $1,000 without receipts. Here is how it works and how it interacts with your own claims.
By Borja Pérez · Updated October 2026
Quick answer: From the 2026-27 income year the ATO applies a standard deduction of up to $1,000 for work-related expenses without receipts. You must be an Australian resident for tax purposes with assessable labour income such as wages. The maximum is the lower of $1,000 or your labour income, and your own claims for certain expenses reduce it dollar for dollar.
- Applies from 1 July 2026, so it is not part of the 2025-26 return due by 31 October 2026.
- It reduces taxable income: at a 30% marginal rate, $1,000 saves about $300 in tax.
- Claim more than the maximum and you need written evidence for all the expenses you claim.
- From 1 July 2026 the $300 work expense limit and the $150 laundry limit no longer apply.
- Source: ATO, standard deduction for work-related expenses.
What the standard deduction is
The Australian Taxation Office describes a default claim of up to $1,000 for work-related expenses, often called the instant tax deduction. It is applied automatically from the information in your return, so you do not have to do anything to receive it, and it reduces your taxable income rather than your tax bill directly.
It starts in the 2026-27 income year (1 July 2026 to 30 June 2027). It does not apply to your 2025-26 return, which is the one due by 31 October 2026 if you lodge yourself.
Who can get it
- You must be an individual and an Australian resident for tax purposes.
- You must earn assessable labour income, such as salary and wages, director fees or parental leave pay. If you only earn other income, such as dividends or business income, it does not apply.
- The maximum is the lower of $1,000 or your total assessable labour income. With $400 of wages, the most you can get is $400.
How your own claims change it
The standard deduction is reduced dollar for dollar by certain work-related expenses you choose to claim, and it can fall to nil. The ATO lists expenses such as stationery, tolls, uniforms, laundry, working-from-home costs and some car and transport expenses as ones that reduce it.
Union fees and professional association memberships do not reduce it, and neither do other deductions such as gifts, rental or investment deductions, tax agent fees, personal super contributions and income protection premiums.
Two simple examples
- You claim nothing yourself. You receive the full $1,000 with no records needed for it. At a 30% marginal rate that lowers your tax by about $300.
- You claim $3,500 of work expenses. The standard deduction is reduced to nil and you claim your $3,500 instead, which needs written evidence such as receipts. This is the ATO's own example.
Whether to claim your own expenses or take the standard deduction comes down to whether your real costs are higher than $1,000. Use the tax brackets page to see your marginal rate.
Records and other changes from 1 July 2026
- If you claim more than the maximum, you need written evidence for all the work-related expenses you claim.
- Records are still needed for union fees, association fees, income protection premiums and other claimed deductions.
- From 1 July 2026 the $300 work-related expense limit, the $150 laundry limit and the award transport expense exemption no longer apply.
Read the full rules on the ATO standard deduction page.
Frequently asked questions
Do I need receipts for the $1,000 standard deduction?
No. The ATO says the standard deduction applies without needing to have spent the money or kept records. You still need records for any expenses you claim yourself, and written evidence if you claim more than the maximum.
Which tax return does it apply to?
It starts with the 2026-27 income year, so it applies to the return you lodge after 30 June 2027. It does not apply to the 2025-26 return.
Is it a tax offset or a refund?
No. It is a deduction that reduces your taxable income, so the tax saved depends on your marginal tax rate.
What if I earn less than $1,000 in wages?
The maximum is the lower of $1,000 or your total assessable labour income, so $400 of wages gives a maximum of $400.
Does it apply to working holiday makers?
The ATO page says you must be an Australian resident for tax purposes and earn assessable labour income. Working holiday makers are often taxed at special rates and their residency depends on their circumstances, so check the ATO residency tests or ask a registered tax agent.
This guide is general information based on the ATO page linked above, checked in October 2026. It is not tax advice and does not consider your circumstances. Rules can change, so check the ATO page or ask a registered tax agent before you rely on it. See our methodology and full disclaimer.