Key Highlights

  • The ATO's draft keeps a $1 full-load and 50-cent mixed-load laundry rate for 2026–27.
  • The rate is only useful if your itemised work expenses exceed the $1,000 standard deduction.
  • The earlier $150 shortcut no longer applies.
  • The guidance is still a draft and may change.

Chefs, nurses, cleaners and anyone else who throws a work uniform in the washing machine got a quiet answer in the ATO's draft guidance on the new $1,000 standard deduction. The familiar $1-a-load laundry shortcut is still there for the 2026–27 income year. The catch is that it only matters if your total work-related expenses come to more than $1,000, because otherwise the flat deduction does the Job without receipts.

That makes this a decision for the year that is already under way. Records kept from 1 July 2026 will decide which option is open when 2026–27 returns are lodged from July 2027.

What the ATO's draft says about laundry

The guidance is Draft Law Companion Ruling LCR 2026/D5, dated 26 August 2026. Comments closed on 9 October and the final version has not yet been published, so the detail could still change.

Appendix 2 of the draft sets out a laundry compliance approach. It allows $1 for a full load of work-related laundry and 50 cents for a mixed load that includes work and other washing.

The draft says the approach covers washing, drying and ironing eligible work clothes. Dry cleaning is not covered by the per-load rate and would need to be claimed on actual costs.

The deduction itself is law, inserted into the Income Tax Assessment Act 1997 by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. It is the ATO's explanation of how it operates, including the laundry rate, that is still in draft.

The $150 shortcut is gone

One long-standing convenience does not survive. Under the old rules, laundry claims of $150 or less were exempt from the written evidence requirements.

LCR 2026/D5 says that exception no longer applies from 1 July 2026. It says the laundry definition has been removed from the law, and the general substantiation rules apply instead.

In practice, that means anyone who wants to claim laundry above the flat deduction would need records that support the claim. That includes a reasonable basis for the number of full and mixed loads, not just a round figure entered at tax time.

The $1-a-load rate is a way to calculate a cost. It does not widen what is deductible.

Under long-standing ATO rules, deductible work clothing is generally limited to compulsory uniforms, occupation-specific clothing such as a chef's checked pants, and protective items such as high-visibility gear or steel-capped boots. Plain black trousers or a white shirt worn to work are conventional clothing and generally do not qualify, even if an employer requires them.

The ATO's chef example

The draft includes a worked example built around Richard, a chef who is eligible for the $1,000 standard deduction in 2026–27.

Richard washes his deductible work clothing in 100 full loads of work-only laundry. Using the compliance approach, he calculates his laundry expenses as $100.

He also has $2,700 of other work-related expenses, supported by records. He claims $2,800 in total, and his standard deduction falls to nil.

The example shows the trade-off at the heart of the new system. Itemised expenses and the standard deduction are not added together. Once you claim actual work expenses, you give up the flat $1,000.

Hypothetical example: a nurse with a uniform

Consider a hypothetical hospital nurse who wears a compulsory uniform. Over 48 working weeks in 2026–27, she washes three loads of uniforms only each week and one mixed load.

Her work-only loads total 144, which at $1 a load comes to $144. Her mixed loads total 48, which at 50 cents a load comes to $24. Her laundry claim is therefore $168.

She also pays $600 in union fees and has $300 of work-related phone costs, all with records. Her itemised total is $168 plus $600 plus $300, or $1,068.

That is $68 more than the $1,000 standard deduction. On the 15% tax rate that applies to income between $18,201 and $45,000 in 2026–27, the extra $68 would be worth about $10 in tax. On the 30% rate, it would be worth about $20.

If the same nurse had only $900 of expenses, the flat $1,000 would be the larger deduction. It would also require no receipts for those expenses.

Laundry on its own rarely pushes a claim over the line, but it can tip the balance for someone already close to $1,000.

Who can use it, and when

The draft treats the standard deduction as available against assessable labour income. It describes that list as exhaustive, covering amounts such as salary and wages, director and office-holder payments, return-to-work payments, certain termination and retirement payments, and parental leave pay.

Business income earned as a sole trader is not on the list. A self-employed worker washing their own work clothes would not get the $1,000 standard deduction, and would claim actual Business expenses instead.

The deduction is also capped at a person's total assessable labour income. It is one cap per person, not one per job.

The draft also indicates that some costs, such as a tax agent's fee, are claimed separately and do not count towards the $1,000. Records are still needed for those.

None of this applies to the 2025–26 tax return many people have just lodged. The ATO has said the standard deduction applies from 2026–27.

For 2025–26 claims, the existing laundry rules continue to apply. That includes the former $150 written-evidence exception for that year.

The practical point for 2026–27 is record-keeping. Someone who expects to sit near or above $1,000 in work costs would need evidence for each item if they want to itemise, and that includes laundry.

A simple diary of loads, kept through the year, is the kind of record that could support a per-load claim.

What to watch

  • Final LCR 2026/D5: the ATO is yet to publish the final ruling. Watch for any change to the $1 and 50-cent rates, the record-keeping expectations or the worked examples.
  • 30 June 2027: the end of the first income year in which the $1,000 standard deduction applies.
  • 1 July 2027: 2026–27 tax returns open, along with the first claims under the new system.
  • 1 July 2027: the lowest personal tax rate is legislated to fall again, from 15% to 14%, which slightly reduces the value of each extra dollar of deduction for workers on that rate.
  • 2027–28: the separate $250 Working Australians Tax Offset is legislated to begin. It is non-refundable and unrelated to laundry claims.