What the $1,000 Standard Deduction Means for Queensland Employees and Salary Packaging

From 1 July 2026, eligible Australian taxpayers can access a new standard deduction of up to $1,000 when lodging their tax return. According to the Australian Taxation Office (ATO), eligible individuals won't need to spend the full amount or keep receipts to access the deduction.

While the change is designed to simplify tax time for many Australians, including Queensland employees, it also affects how some work-related expenses can be accessed through salary packaging. Understanding these changes now can help you make informed decisions about your employee benefits before further changes take effect in April 2027.

What is the $1,000 standard deduction?

The $1,000 standard deduction became available from 1 July 2026 and allows eligible taxpayers to claim up to $1,000 when lodging their tax return without needing to keep receipts for eligible expenses.

The aim is to make tax time simpler and reduce the amount of record keeping required for many employees. However, if you're claiming eligible deductions above $1,000, you'll still need to keep records to substantiate your claim.

How will the standard deduction impact salary packaging?

The introduction of the standard deduction has resulted in changes to the Fringe Benefits Tax (FBT) treatment of many work-related benefits currently available through salary packaging.

As a general rule, employees cannot receive two tax benefits for the same expense.

And it means that some work-related expenses that can currently be salary packaged will no longer be available through salary packaging from 1 April 2027. Eligible employees can instead access the standard deduction through their tax return.

Which work-related expenses can no longer be salary packaged?

From 1 April 2027, the following work-related expenses will no longer be available through salary packaging:

• Self-education expenses
• Electronic devices
• Home office expenses
• Tools of trade
• Uniforms
• Subscriptions

These changes may affect how employees choose to access tax benefits associated with these expenses in the future.

What can still be salary packaged after 1 April 2027?

While many work-related expenses are changing, some benefits will remain available through salary packaging. These include:

• Professional Membership Fees
• Airport Membership
• Income Protection Insurance
• Investment Loan Interest
• Financial Counselling Fees

If you choose to salary package one of these expenses, you generally can't also claim the same expense as a tax deduction through your tax return.

What happens between now and 1 April 2027?

There is a transition period between 1 July 2026 and 31 March 2027. During this time, eligible employees may still be able to access certain benefits through salary packaging, even though the standard deduction is available.

However, the same expense generally can't be both reimbursed through salary packaging and claimed as a tax deduction. For example, if you salary package a laptop, you generally can't also claim a tax deduction for that purchase.

Because everyone's circumstances are different, it's important to consider how these changes apply to your individual situation and seek professional tax or financial advice if needed.

Important dates for Queensland employees

1 July 2026

The $1,000 standard deduction became available for eligible taxpayers.

1 April 2027

Changes to the salary packaging treatment of many work-related expenses take effect.

Until then, existing arrangements can generally continue as normal.

Got questions about salary packaging?

If you'd like to understand what benefits may be available to you before the changes take effect, contact RemServ on 1300 30 30 40 or visit MyRemServ online or via the app to explore your options.