Highlights

  • But the income year that began on 1 July 2026 already operates under a different system, and one familiar shortcut has gone.
  • The $300 limit for claiming work-related expenses without records no longer exists, so the receipts that matter for next year's return are being generated now.
  • The change sits in Schedule 4, "Standard deduction for work-related expenses", of the Treasury Laws Amendment (Tax Reform No.
  • It is enacted law, and the ATO has published guidance explaining how it works.

The record-keeping shortcut that let workers claim up to $300 without receipts ended on 1 July 2026. Under the new $1,000 standard deduction, claiming more than the standard amount means proving every dollar. Millions of Australians are finishing their 2025–26 tax returns ahead of the 31 October self-lodgment deadline, which falls on a Saturday this year.

What the Changes Mean

Those returns still run on the old record-keeping rules. the $300 limit for work-related expenses claimed without records the $150 laundry expense limit the award transport expense exemption In their place sits a new standard deduction of up to $1,000 for eligible workers. The ATO says it applies from the 2026–27 income year and is not available for Tax Time 2025–26. It will first appear in returns lodged from July 2027.

How the new evidence rule works

The ATO's position turns on one comparison: are your work-related expenses above or below your maximum standard deduction? The maximum is the lower of $1,000 or your total assessable labour income. Labour-related work expenses you claim reduce the standard deduction dollar for dollar, down to nil. If you claim more than your maximum standard deduction, the ATO says you need written evidence, such as receipts, for all the work-related expenses you claim. Not just the amount above $1,000. If your expenses stay below the maximum, the ATO says records are "not required but are recommended", because costs can rise unexpectedly during the year. The standard deduction does not end record-keeping. The ATO says records are still required for claimed work-related expenses, union and association fees, income protection premiums and other claimed deductions. Some of those items, such as union fees, income protection premiums, donations and tax agent costs, do not reduce the standard deduction. They are claimed on top of it, but still need records. That distinction matters for workers who assume the $1,000 replaces every deduction. It replaces itemised labour-related work expenses only. There is no small-claim exemption either. Under the old system, a small claim could be made without receipts as long as the total stayed within $300. That safety net has gone for every taxpayer, regardless of income or occupation.

Hypothetical example: two workers, two outcomes

Hypothetical example: The figures below are illustrative. The tax value uses an assumed 30% marginal rate and ignores the Medicare levy. Worker A spends about $280 a year on small work items and keeps no receipts. Under the old rules, that kind of claim could sit under the $300 limit. In 2026–27, Worker A has no reason to claim the $280 at all. Leaving it out means the standard deduction is not reduced, so the full $1,000 applies automatically to eligible taxpayers, with no receipts needed. Worker B expects $1,800 of work expenses across 2026–27. To claim the full $1,800, Worker B needs written evidence for the whole $1,800, and the standard deduction falls to nil.