You might have heard whispers about a new $1,000 standard deduction for work expenses. The ATO has just clarified something important, and I wanted to give you a quick heads-up.

In short:

The ATO has recently updated its Employees guide for work expenses to remind taxpayers that the new $1,000 standard deduction cannot be claimed for the 2026 income year.

It only kicks in for the 2027 income year (1 July 2026 to 30 June 2027) and later years. From then, you'll be able to choose either the standard deduction of up to $1,000 for work-related expenses, or a deduction for your actual work-related expenses.

So what does this mean for you? For your 2026 tax return, nothing changes — claim your actual work-related expenses as usual, with the evidence to back them up.

But for your 2027 tax return, you'll have a choice to make. And to make the right one, you'll need to know both numbers. That means keeping your receipts and records for work expenses incurred from 1 July 2026 to 30 June 2027, so that at tax time you can see whether your actual expenses add up to more than $1,000. If they do, claiming the actual amount will be worth more to you. If they don't, the standard $1,000 deduction is the simpler option — no receipts required.

So, the main thing to remember: keep those records diligently for the year ahead. Having the actual figures means you're always ready to make the most informed choice for your 2027 return.

Hope this helps you plan ahead and make the best choice for your 2027 tax return!

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