From 1 July 2026, eligible taxpayers will be able to claim a flat $1,000 deduction for work-related expenses without needing to keep receipts or itemise individual costs. This is a choice, not an automatic change you will still need to decide whether the flat deduction or your actual expenses gives you the better result.

Who Is Eligible

Australian tax residents who earn income from work are eligible. If your income comes only from investments or rental properties, this does not apply to you though you can continue claiming deductions under the existing rules.

Will It Actually Save You Money?

The deduction reduces your taxable income by $1,000. The actual tax saving depends on your tax rate:

• At a combined rate of 18% (16% plus the 2% Medicare Levy), the saving is $180.
• At 32% (30% plus Medicare Levy), the saving is $320.
• At 47% (45% plus Medicare Levy), the saving is $470.

If you currently claim more than $1,000 in legitimate work-related expenses, claiming your actual expenses remains the better approach. If you typically claim less than $1,000, the flat deduction could give you a modest boost at no administrative cost.

A Few Important Points

Charitable donations, union and professional association fees, and other non-work deductions can still be claimed on top of the $1,000 flat deduction. We will review your specific situation when preparing your return and work out which approach puts you in the best position.

If you have any questions about your work-related expenses in the meantime, please give us a call.

t: +61 73177 4120
e: advisors@hksrusell.com

Posted on May 15, 2026 by Charisse Russell - Articles