Millions of Australians will be able to claim an instant $1,000 tax deduction without receipts for the first time under new legislation to be unveiled on Monday.
Long promised by governments but never delivered, the big change will finally be enshrined in law later this year.
The election promise is designed to allow taxpayers to choose to claim a the instant tax deduction instead of keeping a box of receipts for individual work-related expenses.
New figures obtained by news.com.au predict that around 6.2 million workers – around 42 per cent of taxpayers – will benefit from the reforms designed to simplify tax returns.
“We’re helping Australians earn more and keep more of what they earn and this is another key way we’re delivering for millions of Australian workers,’’ Treasurer Jim Chalmers told news.com.au.
“We’re reforming the tax system to make it easier, simpler and faster to do your taxes.
“This is tax reform and a bit of extra tax relief at the same time.”
But while the proposal officially starts on 1 July 2026, it won’t apply until you file your 2027 tax return.
The maximum tax saving is $470, with an average saving of $205.
For workers who want to claim more than $1,000 in work-related deductions, the old rules will still apply, you will simply need to provide receipts.
Charitable donations and other non-work-related deductions will continue to be claimed on top of the instant tax deduction.
Around 3.3 million taxpayers who benefit (54 per cent of those benefiting) are women, with an average benefit of $200.
Around 1.7 million taxpayers who benefit (28 per cent, or more than a quarter of those benefiting) are under age 30, with an average benefit of $200.
Occupations with the largest number of individuals expected to benefit from the instant tax deduction in 2026-27 include around 250,000 sales assistants, 200,000 office workers, 180,000 nurses and more than 100,000 childcare workers.
CPA Australia’s Tax Lead Jenny Wong has previously warned that many workers should still keep their receipts.
“The core selling point of the reform is that taxpayers won’t need to collect receipts for deductions under $1,000,’’ she said.
“Yet, the policy also allows anyone with expenses above $1,000 to continue itemising their claims to ensure they receive their full entitlement.
“This creates a record keeping paradox.
“To know whether your legitimate work-related expenses (WRE) exceed the $1,000 threshold, you must still keep records and provide evidence of your spending throughout the year.
“If taxpayers stop tracking their expenses in the hope of an easy “instant” deduction, they risk missing out on the full refund they are entitled to if their actual costs such as professional equipment, home office expenses, or self-education surpass the flat $1,000 limit.”
She warned that there was also an inherent inefficiency.
“The government is committing billions in revenue to provide tax breaks to individuals who may have zero work-related expenses,” she said.
“While the government estimates the average relief at $205 per person, this is not a targeted reimbursement for the costs of earning an income; if left unchecked it could become a broadbased subsidy that does nothing to encourage taxpayers to take greater responsibility for their financial obligations.”
