From 1 July 2026 you can claim a flat $1,000 for work related expenses without receipts, or claim your actual costs with full records. You choose one or the other for the year, not both.
What does the flat $1,000 replace?
The requirement to substantiate, not the deduction itself. You put $1,000 on the work related expenses line without receipts, logbooks or diaries behind it.
It covers the ordinary work expenses of a backpacker year: protective clothing and its laundry, tools and small equipment, the work share of a phone plan, work related vehicle use, licences and registrations, and self education tied to the job you already have. It does not extend to items outside that category, such as donations or investment expenses, which keep their own rules and can still be claimed separately.
When is the flat $1,000 the better choice?
When your real work expenses came to less than $1,000, the ordinary position for hospitality, retail and cafe work. Someone whose only costs were a couple of black shirts, laundry and a share of their phone claims more than they spent, lawfully.
It also wins when the expenses were real but the records are not. Receipts lost in a hostel move, a phone replaced mid year, dozens of small purchases: all irrelevant if the flat amount exceeds what you could have proved.
When are actual costs better?
When the job required equipment. A construction labourer buying boots, hard hat, high visibility gear and hand tools across a season, or a rideshare driver running a car for work, will normally exceed $1,000 on the vehicle alone.
Vehicle use most often decides it. At 91c per kilometre under the cents per kilometre method, a driver covering a few thousand work kilometres passes $1,000 before anything else is counted, and that claim needs the records that go with it.
- Tools and equipment beyond incidental purchases
- Protective gear bought rather than supplied
- Work related vehicle kilometres at 91c each
- A phone and data plan used substantially for work
Can you take the flat amount and add to it?
No. It is one method or the other for the whole work related expenses category in that year.
So the choice has to be made after the arithmetic. Expenses of $1,200 claimed under the flat rate forfeit $200; the same $1,200 substantiated is claimed in full. Where the two land close together, the flat rate is usually still better once the record keeping is weighed against the difference.
Which financial year does it apply to?
The 2026-27 year, which runs from 1 July 2026 to 30 June 2027 and is lodged from July 2027 onwards. It is not retrospective, so a 2025-26 return or any earlier year is still prepared under the existing substantiation rules including the $300 threshold for tools and equipment.
Timing decides it. Someone who arrived in early 2026 has income split across two financial years under two different sets of deduction rules, and the same expense can be treated differently depending on which side of 30 June 2026 it fell.
What is the deduction actually worth to you?
Less than the headline, because a deduction reduces taxable income rather than tax. At the working holiday maker rate of 15%, a $1,000 deduction reduces tax payable by $150.
Above $45,000 the rate rises to 30% and the same deduction is worth $300, but few working holiday makers reach that bracket in a single year. The measure is neutral on visa status and applies to a 417 or 462 holder the same way as to an Australian resident, so nothing about the tax return changes beyond the choice of method.
What still needs records even under the flat rate?
Everything outside the work related expenses category. Charitable donations, the cost of managing your tax affairs including last year's agent fee, and income protection premiums keep their own record keeping rules.
The same is true on the income side. Cash income, ABN receipts and platform payments still need to be recorded and declared.
Does it change what you should keep during the year?
Not immediately. You cannot know which is better until the year is over, so throwing receipts away in October forecloses the choice.
Photograph receipts as they happen and decide in July. For a hospitality or retail year the flat rate will almost certainly win. For a construction or driving year the total will very likely exceed $1,000, and the photographs are the difference between claiming the real figure and the capped one.