Around 6.2 million workers are set to benefit from the Albanese Government's $1,000 instant tax deduction, with public consultation on draft legislation commencing today.
This is about making the tax system simpler and delivering more lasting cost‑of‑living relief to taxpayers.
The reforms will allow workers to knock a thousand dollars off their taxable income without providing receipts when they lodge their 2026-27 tax return.
This will help workers cut back on the paperwork and save them time and money at tax time.
For 2026-27, 6.2 million workers (42 per cent of taxpayers) are expected to benefit from the proposal, with an average tax saving of $205.
Around 3.3 million of the taxpayers who benefit (54 per cent of those benefitting) are women, with an average benefit of $200.
Around 4.5 million taxpayers who benefit (three quarters of those benefitting) have less than $100,000 taxable income, with an average benefit of $195.
Around 1.7 million taxpayers who benefit (28 per cent, or more than a quarter of those benefitting) are under age 30, with an average benefit of $200.
Taxpayers claiming more than $1,000 in work‑related deductions will still be able to do so in the usual way. Charitable donations and other non‑work related deductions would continue to be claimed on top of the instant tax deduction, as will union or other trade, business or professional association memberships.
The $1,000 instant tax deduction builds on the Albanese Government's substantial and responsible cost‑of‑living relief which also includes the three month cut to fuel taxes, two more rounds of tax cuts, cheaper medicines and childcare, student debt relief and higher wages.
Subject to the passage of legislation, the instant tax deduction will apply from the 2026-27 income year onwards meaning workers will see the benefits when lodging their tax return in the second half of 2027.
The Government is delivering a fairer, simpler and more sustainable tax system that will help Australian workers earn more and keep more of what they earn, and implementing a $1,000 instant tax deduction is a big part of that reform agenda.
The Government invites submissions on the draft legislation, with consultation closing on 1 May 2026.
