The Fine Print Australia · PUBLISHED 24 JUN 2026 · VERIFIED 24 JUN 2026 · AU EDITION

$300 Rule: Tax Deduction Receipts the ATO Wants in 2026

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If your total work-related expenses are $300 or less, the ATO says you may not need written evidence like receipts—but you still must have actually spent the money and be able to explain how you worked out the claim.

The number that matters

The central rule is 3: you can only claim a deduction if you spent the money yourself, the expense directly relates to earning your income, and you have a record to prove it (usually a receipt).

How it quietly costs you

The first quiet money leak is substituting “I think I spent it” for records: the ATO’s rule is that a deduction needs proof, usually a receipt, invoice, or equivalent record. For small claims, the ATO’s practical threshold is $300 total work-related expenses for the year without written evidence, but that is not an automatic entitlement and still requires a defensible calculation.

• Mechanism: no record means the expense is harder to substantiate if the ATO asks.
• Impact: you can lose the deduction entirely if you cannot prove it.
• Old vs better: “I have a bank transaction” is weaker than a receipt plus a clear description of what was bought; where receipts are missing, the ATO still expects other evidence and a reasonable basis.

The second, compounding trap

The second layer is misunderstanding the ATO’s exceptions, especially the difference between the general substantiation rule and the specific $300 small-expense rule. That confusion can lead to either overclaiming or underclaiming, both of which create a cash cost: overclaiming can trigger a denial or ATO adjustment, while underclaiming leaves money unclaimed on the return.

• Mechanism: people assume “no receipt” means “no problem,” or they assume “bank statement only” is always enough.
• Impact: the deduction can be disallowed, and the taxpayer can miss legitimate claims.
• Long-run cost: repeated missed claims compound across multiple tax years because the ATO requires records to support each year’s deduction claim.

What this looks like in practice

Mia, 34, is a full-time marketing coordinator in Sydney earning $78,000 a year, with about 8 years to retirement and roughly $1,200 in annual work-related expenses, including a laptop bag, phone, stationery, and home-office costs.

• She discovers the ATO’s $300 no-written-proof threshold is not a blanket allowance; it applies only to total work-related expenses, and she still has to explain how she calculated the claim.
• She discovers a bank statement alone is often not as strong as a receipt, because the ATO wants evidence of what was bought, not just that a payment happened.
• She discovers that for receipts she does not have, the ATO may still accept other evidence such as diary notes, digital confirmations, or logbooks, but only if they substantiate the expense.

The full cost of doing nothing

For Mia, the combined cost of Problems 1 and 2 is the value of any deduction she cannot substantiate, plus any legitimate deductions she forgets to claim, and the total can easily run into hundreds of dollars per year if she regularly spends around $300–$1,200 on deductible work items. Model basis: a simplified annual example using the ATO’s $300 no-written-proof threshold, plus a broader annual work-expense profile that must still be supported by records.

What to do about it

• Check your deduction eligibility in the ATO’s Claiming deductions page and identify whether each expense was paid by you, related to earning income, and supported by a record.

• Find the relevant figure by reading the three deduction rules and the record-keeping guidance.

• Step 1: Open the ATO deduction rules section.

• Step 2: Match each expense to the three rules.

• Step 3: Flag anything without proof for replacement evidence.

• Good: every claim has a clear link to income and a supporting record.

• Use the ATO guidance on what counts as proof to decide whether a receipt, invoice, bank statement, diary note, or logbook is acceptable for each expense.

• Find the relevant figure by checking whether the expense is under the $300 small-claims threshold or needs full substantiation.

• Step 1: Sort expenses by amount and type.

• Step 2: Match each item to the evidence type the ATO accepts.

• Step 3: Save a digital copy of every acceptable record.

• Good: you can explain what you bought, when, for how much, and why it was work-related.

• Review the ATO’s “What’s new for individuals” page before lodging to see whether any rule changes affect the year you are claiming for.

• Find the relevant figure by checking the current income year rules and any changes.

• Step 1: Open the ATO “What’s new for individuals” page.

• Step 2: Confirm the income year and deduction rules.

• Step 3: Update your records before lodging.

• Good: no claim depends on a rule you have not verified for the correct tax year.

A myth worth clearing up

Myth: “If I have a bank statement, I don’t need receipts.” Fact: The ATO’s rule is that you need a record to prove the expense, and a bank statement alone may not show what was actually purchased; the ATO often expects a receipt, invoice, or another record that substantiates the claim.

Sources

• ATO
• ATO

Researched 2026-06-24.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.