Car Claims, Working From Home and the $1,000 Deduction: What You Can Actually Claim in 2026–27

6 days ago

3 min read

Status and effective date — 5 September 2026 The 91 cents per kilometre rate and the $1,000 standard work deduction both apply from 1 July 2026 (your 2026–27 return, lodged from July 2027). The $1,000 deduction is law (Royal Assent 26 June 2026). The ATO had not published a 2026–27 working-from-home fixed rate at the time of writing.

Every tax season, someone on Facebook suddenly becomes a tax expert. The problem is that tax law doesn't run on Facebook posts.

Here's the practical version: what you can actually claim in 2026–27, and where people get into trouble.

Deductions still need a connection to work

A deduction generally needs to relate to earning your income, and you need evidence to back it up. If an expense is private, or you can't show it was for work, it isn't deductible — no matter how confidently someone online tells you otherwise.

Car claims — the rate has gone up

If you use the cents-per-kilometre method, the rate for 2026–27 is 91 cents per kilometre, capped at 5,000 business kilometres — so the maximum claim this way is $4,550 for the year.

The rate is the easy part. The traps are:

Home-to-work travel is usually private and not claimable.
Client visits, business errands and genuine work travel may be claimable — but you need a basis for the kilometres.
A logbook can sometimes give a better result, but only if your records support it.

You can't simply write down 5,000 kilometres because it's the maximum.

Working from home — don't assume the rate

The fixed-rate method lets you claim a set amount per hour worked from home, covering electricity, gas, internet, phone and stationery. For 2024–25 and 2025–26 that rate was 70 cents per hour — confirm the exact figure for 2026–27 before you lodge rather than assuming.

Either way, the records make or break the claim:

Keep a timesheet or diary of the hours you worked from home.
Keep evidence you paid for the running costs.
Keep receipts for any equipment you bought.
Don't double-count — if the fixed rate covers a cost, you can't also claim it separately.

The new $1,000 standard work deduction

From the 2026–27 income year, resident workers can claim a standard work-related deduction of up to $1,000 without substantiating each expense. This is now law (it passed Parliament and received Royal Assent on 26 June 2026) and you'll first see it on the tax return you lodge after 30 June 2027. The catch: it replaces your car, working-from-home and other everyday work claims up to $1,000 — it isn't $1,000 on top of them. If your actual covered expenses are higher, you claim the actual amount instead, with records.

It's real — but don't throw away your receipts because you saw a headline.

Why receipts still matter

The $1,000 is a floor, not a ceiling. Plenty of people already claim more. A nurse, tradie, teacher, sales rep or mobile worker often spends far more on genuine work expenses — and you can only claim the higher figure if you kept the records. Union and professional fees, income protection premiums, donations and tax agent fees sit outside the $1,000 and are still claimed separately.

Red flags that slow down your return

Claiming car expenses with no logbook or basis.
No diary for your working-from-home hours.
Claiming the full 5,000 kilometres automatically with nothing to support it.
Claiming 100% of phone and internet when there's obvious private use.
Claiming private travel as work travel.
Uploading a pile of bank statements with no explanation.

A better record-keeping checklist

Track your work kilometres month by month.
Keep a simple working-from-home diary.
Save receipts in one folder (digital is fine).
Note the business purpose on any large expense.
Ask us before making a big or unusual claim.

Before you lodge

The safest way to a good result is to claim what you're genuinely entitled to, with records to back it up — not to chase risky shortcuts. Send us your car, working-from-home and other work-related expense details before lodging, and we'll work out whether the $1,000 standard deduction or your actual expenses gives the better result.

General information only, current at 5 September 2026. Speak with us about your own circumstances.