Tax deductions: what you can claim
Tax deductions are costs you subtract from assessable income before tax is worked out, mostly work-related expenses claimed in myTax or through a registered tax agent. From 2026-27, workers also get a standard deduction of up to $1,000 with no receipts.
By Calculatax
Deductions are one part of your return, and the tax return guide covers lodgment dates, myTax and refunds.
| At a glance | Figure | Applies to |
|---|---|---|
| Standard deduction for work-related expenses | Up to $1,000, no receipts | From 2026-27 |
| Working from home fixed rate | 70c per work hour | 2024-25 and 2025-26 |
| Working from home fixed rate | 70c (2025-26 rate), provisional | 2026-27 |
| Tax saved by a $1,000 deduction | $220 at $40,000, $320 at $85,000, $390 at $150,000, $470 at $210,000 | 2026-27 |
| Medicare levy | 2% on most incomes, which adds to what a deduction saves | 2026-27 |
- Work from home deduction calculatorWorks out a fixed rate or actual cost claim from your home office hours.
- Tax return calculatorShows how deductions change your refund or bill.
- Marginal tax rate calculatorFinds the rate that sets the value of each extra dollar of deductions.
Three rules every work deduction must meet
A work-related expense has to pass all three of the ATO's tests before you can claim it.
- 1
You spent the money yourself
If your employer paid or reimbursed you, you can't claim it.
- 2
It relates to earning your income
Private costs don't count, and a mixed cost is claimed for its work part only.
- 3
You have a record to prove it
That's usually a receipt or invoice from the supplier.
A phone you use 30% for work gives a 30% claim. The standard deduction below is the one exception to the first and last tests, because it needs no spending and no records.
The $1,000 standard deduction from 2026-27
From the 2026-27 income year, Australian residents with labour income get up to $1,000 without having to spend the money or keep records. You don't need to claim it, because the ATO applies it to your return automatically.
Labour income includes salary and wages, director fees and parental leave pay. The maximum is the lower of $1,000 and your labour income, and you can't use it if your only income is dividends or business income. It first applies to 2026-27 returns, so the ATO's standard deduction page (opens in a new tab) rules it out for 2025-26 returns.
Claiming work costs doesn't add to it while they stay under $1,000. Each dollar you claim takes a dollar off the standard deduction, so you end up at the same total.
| $85,000 income, 2026-27 | Claimed in your return | Standard deduction left | Total deduction | Tax saved |
|---|---|---|---|---|
| $640 of costs, none claimed | $0 | $1,000 | $1,000 | $320 |
| $640 of costs, all claimed | $640 | $360 | $1,000 | $320 |
| $1,500 of costs, all claimed | $1,500 | $0 | $1,500 | $480 |
So with $640 of costs you can skip the claim and the record keeping. Once your costs pass $1,000, you claim them all and keep written evidence for all of them.
What reduces it, and what lower incomes save
Working from home, car, uniform, laundry and stationery costs reduce it dollar for dollar. So do tolls, travel between workplaces, and the decline in value of work equipment. The ATO's example also counts a work-related training course.
Union fees and professional association memberships don't reduce it, and neither do gifts, tax agent fees or income protection premiums. You claim those on top, with records.
Lower incomes save less from the same deduction. At $40,000, $1,000 saves $220: $150 of tax at 15%, $50 of extra low income tax offset and $20 of Medicare levy.
The law is Schedule 4 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.
Work-related expenses by type
Working from home
You can use the fixed rate method or the actual cost method. The ATO's fixed rate method page (opens in a new tab) gives 70 cents per work hour for 2024-25 and 2025-26, covering energy, phone, internet and stationery.
It hasn't stated a 2026-27 rate. Until it does, we show 70c (2025-26 rate) as the latest stated figure. The work from home deduction calculator works through both methods.
Car and travel
You can claim car expenses for work trips, such as between workplaces or out to clients. Normal travel between home and work is private.
The cents per kilometre rate for 2026-27 is 91 cents under the cents per kilometre determination (opens in a new tab), for up to 5,000 business kilometres per car. The other common route is a logbook, which documents your work-related car use.
Clothing and laundry
Compulsory uniforms, protective clothing and occupation-specific clothing can be claimed, along with the cost of washing them. Conventional clothing, such as black trousers, can't be claimed even if your employer requires it.
From 2026-27 the ATO accepts $1 per load of work clothes, or 50c per load if you mix in other clothes.
Self-education
Study that connects to your current job can be deductible. Study that may help you get a new job or change jobs can't be claimed. Neither can HELP repayments.
Tools and equipment
An item costing $300 or less can be claimed in full in the year you buy it, if you use it mainly to earn non-business income. It can't be part of a set, or one of a number of identical items, costing more than $300.
Dearer items are claimed over several years as they decline in value, as the ATO's tools and equipment page (opens in a new tab) sets out.
Check the rules for your own job. These are general rules, summarised from ATO guidance. The ATO publishes guides for many occupations, and a registered tax agent can confirm what applies to you.
Records the ATO expects
Written evidence comes from the supplier and shows the cost, the supplier's name, what you bought and the date. A bank or credit card statement on its own doesn't count.
The ATO's records you need to keep (opens in a new tab) page says to hold it for 5 years from the date you lodge your tax return. Keep a note of how you worked out the work share too.
Claims with no full receipts
2025-26 returns
- Total work claims of $300 or less
- You still show you spent the money and how you worked it out
- Laundry of $150 or less
- Allowed within the $300, with a record of how you worked it out
- Standard deduction
- Not available
2026-27 returns onward
- Total work claims of $300 or less
- Exception removed
- Laundry of $150 or less
- Exception removed
- Standard deduction
- Up to $1,000, no records
From 2026-27, if you claim more than your standard deduction, you need written evidence for every work expense you claim. Keep your receipts during the year if your costs might pass $1,000.
How do tax deductions work?
A deduction lowers your taxable income, so you save tax at your marginal rate rather than the full amount. At $85,000 in 2026-27, each dollar saves 32 cents including the Medicare levy. A $1,000 deduction cuts tax by $320, and at $40,000 the same deduction saves $220.
What deductions can I claim?
You can claim work costs you paid, weren't reimbursed for and can prove, plus gifts to DGRs, income protection outside super and tax agent fees. From 2026-27, the $1,000 standard deduction applies automatically. It only makes sense to claim work costs when they pass that amount.
Is GoFundMe tax deductible?
Usually no. A crowdfunding gift is only deductible when the organisation receiving the money is a DGR, and the ATO says many campaigns aren't run by one. If a DGR does run the appeal, a $100 gift saves $32 for someone on a 30% marginal rate plus Medicare. You can check an organisation's status on ABN Lookup.
Is stamp duty tax deductible?
Not on the transfer of a rental property. That duty goes into the property's cost base, which reduces any capital gain when you sell. Stamp duty on the mortgage is different: it's a borrowing expense you can claim over up to 5 years. We haven't confirmed the rule for your own home or a car, so ask a registered tax agent about those.
Estimates only, based on published rates for 2026-27. General information, not tax or financial advice.
Keep going
Sources
- ATO: Standard deduction for work-related expenses (opens in a new tab)
- ATO: Working from home fixed rate method (opens in a new tab)
- ATO: Records you need to keep (opens in a new tab)
- ATO: Tools and equipment to perform your work (opens in a new tab)
- Federal Register of Legislation: Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026 (opens in a new tab)