{"id":618868,"date":"2026-04-20T09:19:08","date_gmt":"2026-04-20T09:19:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/618868\/"},"modified":"2026-04-20T09:19:08","modified_gmt":"2026-04-20T09:19:08","slug":"millions-of-australians-will-get-a-1000-instant-tax-deduction-under-a-new-law-heres-how-it-will-work-australian-politics","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/618868\/","title":{"rendered":"Millions of Australians will get a $1,000 instant tax deduction under a new law \u2013 here\u2019s how it will work | Australian politics"},"content":{"rendered":"

Millions of Australian workers from next year will be able to \u201cinstantly\u201d claim a standard deduction of up to $1,000 in work-related expenses without having to keep receipts.<\/p>\n

The draft legislation for the policy landed on Monday, just over a year after Labor proposed the change in the run-up to the 2025 election.<\/p>\n

Let\u2019s take a look at what it means for you.<\/p>\n

Sweet, a $1,000 instant tax deduction!<\/p>\n

Slow down!<\/p>\n

No, you don\u2019t get a grand off your tax bill.\u00a0<\/p>\n

What you can do is reduce your taxable income by that amount; the size of your tax deduction will depend on your marginal tax rate.\u00a0<\/p>\n

For example, if you earn $100,000 a year, your marginal tax rate is 30%.\u00a0 Reducing your taxable income by $1,000 will mean your tax bill will be $300 lower.<\/p>\n

Treasury says the maximum benefit will be $470, and estimates the average benefit will be about $205.\u00a0<\/p>\n

About four in 10 workers, or 6.2 million workers, will benefit from the new rules, Treasury reckons.<\/p>\n

Note that these are expenses that relate to earning income from labour, not from your business or investments.<\/p>\n

And you can only reduce your taxable income from labour to $0, not below.<\/p>\n

Still sounds pretty great. Why the change to tax rules?<\/p>\n

In Jim Chalmers\u2019 words: \u201cThis will cut back on paperwork, it will save time and money, and it will provide a bit of tax relief as well.\u201d<\/p>\n

\u201cIt\u2019s a good symbol of what we are trying to do more broadly \u2013 cutting income taxes, cutting red tape and helping out where we can,\u201d the treasurer told journalists<\/a> on Monday morning.<\/p>\n

Sign up for the Breaking News Australia email<\/a><\/p>\n

For a more official rationale, Treasury in its explanatory materials<\/a> said that the change was a \u201ccompliance saving measure\u201d that will mean \u201ctaxpayers can rely on receiving a standard amount without requiring substantiation\u201d.<\/p>\n

I\u2019m still a bit confused how this will work.<\/p>\n

Let\u2019s use Treasury\u2019s example of the fictional Nicky, who claims these expenses:<\/p>\n

$200 in work from home expenses<\/p>\n

$50 in stationery that is required for their job<\/p>\n

$50 for a work-related subscription<\/p>\n

$150 for travelling between workplaces<\/p>\n

$50 for a charitable donation<\/p>\n

$150 for a tax agent to do their income tax return<\/p>\n

To begin with, the charitable donation and the tax agent don\u2019t relate to costs incurred as part of doing your job, so they can be claimed in addition to the $1,000.<\/p>\n

The first four items are work-related expenses and sum to $450. Nicky can claim the $1,000 standard deduction without providing any receipts.<\/p>\n

Technically, the way it will operate is that \u201cthe $450 work-related expenses reduce the $1000\u201d. This means Nicky cannot claim another $1,000 on top of the $450 they are already claiming; instead, they claim another $550 \u2013 taking their total standard deduction to $1,000.<\/p>\n

Importantly, taxpayers will receive the benefit even if they don\u2019t claim any expenses. Let\u2019s say Nicky couldn\u2019t be bothered claiming their $450 in work-related expenses in their tax return.<\/p>\n

Treasury\u2019s explanatory memo says they still get the $1,000 standard deduction.<\/p>\n

(Nicky will still need to separately claim the donation and the accountant fees, though.)<\/p>\n

What if I have more than $1,000 in expenses?<\/p>\n

Bad news.<\/p>\n

You\u2019ll need to list and substantiate all of your work-related expenses, which means you better keep all of your receipts.<\/p>\n

Basically, this change to the rules is no help at all if your expenses are more than $1,000.<\/p>\n

How much is this going to cost the federal budget?<\/p>\n

The Parliamentary Budget Office last year estimated the policy would cost $1.24bn in 2027-28 (the first year where tax returns would be filed), and $1.25bn in the following year.<\/p>\n

By the middle of the 2030s, it will be costing about $1.4bn a year, according to the PBO.<\/p>\n

What\u2019s next?<\/p>\n

Treasury has asked for feedback on the draft legislation by 1 May.<\/p>\n

This feedback will be considered for final draft legislation to be presented to parliament, where it has a good chance of being waved through.<\/p>\n

After all, what politician wants to get in the way of some extra tax relief for hard-working Aussie battlers?<\/p>\n","protected":false},"excerpt":{"rendered":"Millions of Australian workers from next year will be able to \u201cinstantly\u201d claim a standard deduction of up…\n","protected":false},"author":2,"featured_media":618869,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-618868","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/618868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=618868"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/618868\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/618869"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=618868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=618868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=618868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}