About the standard deduction
From the 2026–27 income year, eligible taxpayers will be entitled to a standard deduction of up to $1,000 for work-related expenses without needing to have spent the money or kept records.
It first applies from the 2026–27 tax return. It does not apply in the 2025–26 tax return.
The standard deduction is a default work-related expense claim that:
- will be automatically applied if you are eligible – you don't need to claim it
- is reduced by any work-related expenses you claim in your tax return – with some exceptions
- reduces your assessable income – it is not a tax offset or rebate
- does not affect other deductions, such as donations or rental property expenses, which you'll need to claim in your tax return as normal.
If you claim more work-related expenses than the $1,000 standard deduction you will need to keep all your records, not just records for deductions above $1,000.
Standard deduction eligibility
You will be eligible for the standard deduction if you:
- are an Australian resident for tax purposes
- earn assessable labour income, which includes
- salary and wages
- director fees and office holder payments
- payments to religious practitioners
- return-to-work payments
- termination and retirement payments
- parental leave pay.
The standard deduction will not apply to other income, such as dividend income or business income.
The maximum standard deduction you can be entitled to is $1,000. If your assessable labour income is:
- $1,000 or more, your maximum standard deduction will be $1,000
- less than $1,000, your maximum standard deduction will be the amount of assessable labour income you earned during the income year.
Expenses not covered by the standard deduction
The following work-related expenses you claim do not reduce the amount of your standard deduction:
- union fees
- memberships of a trade, business or professional association.
You will need to claim these work-related expenses in your tax return, if they are not already pre-filled. You will need to have the required records to support your claim, such as a statement of the fees or subscriptions you paid.
You need to claim all other tax deductions you're entitled to in your tax return as usual, such as:
- gifts and donations
- investment and rental property deductions
- the cost of managing your tax affairs
- personal super contributions
- income protection, personal sickness or accident insurance premiums
- expenses you incur in earning other types of income, such as business or the gig economy.
Record keeping
Even if you expect your work-related expenses to be lower than $1,000, it’s still a good idea to keep records. Unexpected costs can arise and may increase your total work-related expenses above $1,000.
You must continue to keep records for any other expenses, such as donations or investments, as you will need to claim these in your tax return.
You'll need to keep records for:
- work-related expenses that you claim in your tax return
- union fees, subscriptions to trade, business or professional associations
- income protection, personal sickness and accident insurance premiums
- all other deductions you claim, such as investments or donations.
This page will be updated to provide further information on related changes to record keeping that apply from 1 July 2026.