If you have previously claimed incidental work-related phone and internet expenses using the ATO’s $50 shortcut, there is an important change from 1 July 2026.
The former administrative shortcut that allowed eligible taxpayers to claim up to $50 for incidental phone, text and internet use with limited documentation is no longer available.
If you want to claim your actual phone or internet expenses, you will generally need to keep appropriate records and be able to demonstrate the work-related portion of your claim.
At the same time, a new $1,000 standard deduction for work-related expenses has been introduced from the 2026–27 income year. This changes the way many employees will approach their work-related deductions.
What was the $50 phone and internet shortcut?
Before 1 July 2026, the ATO’s administrative approach in PS LA 2001/6 allowed taxpayers whose device use was incidental to claim up to $50 in total for phone calls, text messages and internet use with limited documentation.
The shortcut provided the following rates:
- Home phone: 25 cents per work-related call
- Mobile phone: 75 cents per work-related call and 10 cents per work-related text message
- Data usage: based on the time or data used for work purposes compared with total usage
The total claim under this approach was limited to $50. The ATO described this method as appropriate where device usage was incidental.
What has changed from 1 July 2026?
The $50 shortcut is no longer available.
If you want to claim a deduction for phone or internet expenses outside the new standard deduction, you need to satisfy the ordinary requirements for a work-related deduction. In particular, you need to have incurred the expense yourself, have a sufficient connection between the expense and earning your assessable income, and be able to substantiate the work-related portion of the expense.
Where a phone or internet service is used for both work and private purposes, you can generally only claim the work-related portion.
Depending on your circumstances, you may need to:
- keep invoices, bills or other evidence that you incurred the expense;
- keep records showing how you calculated your work-related use;
- undertake a representative four-week usage diary where appropriate; and
- apportion bundled phone, internet or data services between work and private use.
The ATO continues to recognise a representative four-week period as a way of establishing the work-related proportion of expenses such as mobile phone and internet use.
What is the new $1,000 standard deduction?
From the 2026–27 income year, eligible taxpayers can claim a standard deduction for work-related expenses of up to $1,000.
The deduction is available to an individual who is an Australian resident at any time during the income year and derives assessable labour income.
The maximum deduction is:
- $1,000, where assessable labour income is at least $1,000; or
- the taxpayer’s total assessable labour income, where it is less than $1,000.
The standard deduction is reduced by certain work-related deductions claimed by the taxpayer. The legislation therefore prevents taxpayers from obtaining a double benefit by claiming the same work-related expenses both through the standard deduction and separately.
Importantly, the $1,000 deduction is a deduction from taxable income, not a $1,000 tax refund.
Do I still need to keep records?
It depends on what you are claiming.
If you rely on the standard deduction for expenses covered by that deduction, you do not need to substantiate those expenses individually.
However, if you have work-related expenses that you want to claim separately, you may need to keep the records required to substantiate those expenses.
This is particularly important if your actual work-related expenses exceed the amount available under the standard deduction. The new rules retain the ordinary substantiation requirements for taxpayers who claim their actual work-related expenses.
Some deductions can also be claimed separately from the standard deduction. These include certain expenses such as gifts and donations, personal superannuation contributions and tax agent fees, as well as qualifying union and professional association membership fees.
What does this mean for phone and internet expenses?
For many employees, the question is now whether it is worthwhile keeping records of actual phone and internet expenses or instead relying on the standard deduction.
For example, if your eligible work-related expenses are relatively modest, the standard deduction may cover them without requiring you to substantiate each individual expense.
On the other hand, if you have substantial work-related expenses, you may need to keep records and claim your actual deductible expenses rather than relying solely on the standard deduction.
The right approach will depend on your individual circumstances and the types and amount of work-related expenses you incur.
What should I do now?
If you incur work-related phone or internet expenses, don’t assume that the old $50 shortcut is still available.
Instead:
- Consider whether the $1,000 standard deduction applies to you.
- Estimate your total work-related expenses for the 2026–27 income year.
- Identify which expenses are covered by the standard deduction and which can be claimed separately.
- Keep appropriate records if you intend to claim actual expenses.
- For phone and internet expenses, keep evidence showing how you calculated the work-related portion.
The introduction of the standard deduction means that keeping detailed records of every small work-related expense may not always be necessary. However, taxpayers with significant work-related expenses should consider their position before deciding not to keep records.
Published 2 October 2026