Instant Asset Write-Off Calculator Australia

The instant asset write-off lets eligible small businesses claim an immediate deduction for assets costing less than $20,000 — rather than depreciating them over several years. For FY2025-26 the threshold is $20,000 per asset (GST-exclusive), available to businesses with aggregated turnover under $10 million, provided the asset is installed and ready for use by 30 June 2026.

Use the calculator below to run a quick eligibility check against all three tests.

Disclaimer: This tool provides general information only and does not constitute tax advice. Consult a registered tax agent for advice specific to your circumstances.

Instant Asset Write-Off Calculator

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What is the instant asset write-off?

The instant asset write-off is a tax concession that allows eligible small businesses to claim an immediate deduction for the full cost of a qualifying asset in the income year it is first used or installed ready for use. Instead of writing the asset off over several years through depreciation, you get the entire deduction upfront — reducing your taxable income (and therefore your tax bill) in the same year you make the purchase.

This is a cash-flow advantage, not an extra deduction. You are still claiming the same total cost over the asset’s life; the write-off simply brings all of that deduction into year one rather than spreading it out. For a small business in a profitable year, that can translate into a meaningful reduction in the tax payable at year-end or estimated tax instalments.

The instant asset write-off has been part of Australia’s small business tax concessions for over a decade, but the threshold has changed many times — from $1,000 in earlier years to $150,000 during COVID-era stimulus, before settling back to $20,000 for FY2025-26. Because the threshold has shifted so frequently, always verify the current figure with the ATO before relying on it.

Eligibility for FY2025-26

Three tests must all pass for an asset to qualify:

1. Aggregated turnover below $10 million

You must be a “small business entity” under the tax law, which for FY2025-26 means your aggregated annual turnover is less than $10 million. Aggregated turnover includes your own turnover plus the turnover of any entities that are “connected with” or “affiliated with” your business. If you are part of a corporate group or have related entities, seek advice on whether your aggregated turnover exceeds the threshold.

2. Asset cost below $20,000 (GST-exclusive)

The $20,000 threshold is applied to the GST-exclusive cost of the asset if your business is registered for GST, because you can already claim the GST back as an input tax credit. If you are not registered for GST, the threshold applies to the total price you paid. The rule is strict less-than: an asset costing exactly $20,000 ex-GST does not qualify.

The threshold applies per asset. There is no cap on the total number of assets you can write off in a year — you can claim the instant write-off on ten separate assets each costing $19,000, for example, and each one qualifies independently.

Both new and second-hand assets are eligible, subject to the cost and timing tests.

3. Asset installed and ready for use by 30 June 2026

Simply ordering or paying for the asset before 30 June is not enough. The asset must be at your business premises, commissioned, and actually available for use by 30 June 2026. An asset that arrives on 1 July 2026 or later does not qualify for FY2025-26, regardless of when you placed the order or made the payment.

What does “installed ready for use” actually mean?

The ATO’s requirement is that the asset must be “installed ready for use” by the end of the financial year. In plain terms, this means:

  • The asset is physically at your business location (or wherever it will be used).
  • It has been set up, connected, or commissioned so that it is capable of being used for its intended purpose.
  • You, as the business owner, are in a position to start using it for your business activity if you choose to.

Practical examples of what does and does not count:

  • A coffee machine that has been delivered, plumbed in, and is sitting ready in the cafe by 28 June: qualifies.
  • A piece of equipment that was ordered in April but is still sitting in the supplier’s warehouse on 30 June: does not qualify — you don’t have it yet.
  • A laptop that was delivered on 25 June but is still in the box, unboxed and not set up: this is a grey area — the ATO’s view is it must be ready for use, not just delivered. Unboxing and setting up by 30 June removes any doubt.
  • A commercial vehicle that was paid for in June but won’t be registered and available until July: does not qualify for FY2025-26.

If there is any doubt about timing, contact your supplier to confirm the delivery and commissioning date in writing before the end of June.

What if my asset is over $20,000?

Assets that cost $20,000 or more (ex-GST) cannot be immediately written off. Instead, they are depreciated over time. For small businesses using the simplified depreciation rules, the two main options are:

Small business simplified depreciation pool

Most depreciable assets not eligible for the instant write-off are added to the pool. The pool uses a 15% deduction rate in the first year (regardless of when during the year the asset was purchased), then 30% of the diminishing pool value in each subsequent year. The pool continues until the balance falls below the instant asset write-off threshold, at which point the remaining balance can be written off immediately.

Opting out of simplified depreciation

A business can choose to opt out of the simplified depreciation rules and use the general depreciation rules (effective life method) instead. This is sometimes preferable for assets with a very long effective life, or when the business expects higher income in later years and wants to defer more of the deduction. Once you opt out, you cannot opt back in for five years, so this decision should be made carefully with your tax adviser.

Cars and the car cost limit

Motor vehicles, including cars, can qualify for the instant asset write-off provided the cost is below $20,000 ex-GST. In practice, most cars cost more than $20,000, so the instant write-off rarely applies.

More importantly, passenger cars (designed to carry fewer than 9 passengers and with a payload of less than 1 tonne) are subject to a separate car cost limit set by the ATO each year. For FY2024-25 the limit was $69,674. For FY2025-26, see the ATO’s car cost limit page for the current figure. This means even if a car’s purchase price is below the instant write-off threshold, the deductible cost cannot exceed the car cost limit.

Utes, vans, and other vehicles designed to carry goods (payload 1 tonne or more) are generally not subject to the car cost limit and can use the instant write-off if under $20,000 ex-GST.

If you are considering buying a vehicle as a business asset, discuss the car limit and balancing adjustment rules with your tax agent before the end of the financial year.

Frequently asked questions

What is the instant asset write-off threshold for 2025-26?

The threshold for FY2025-26 is $20,000 per asset (GST-exclusive). You can claim an immediate deduction for each asset that costs less than $20,000 ex-GST, provided your aggregated turnover is below $10 million and the asset is installed and ready for use by 30 June 2026. Note: the threshold has changed many times in recent years — confirm the current limit with the ATO before making purchasing decisions.

Is the $20,000 threshold per asset or total spend?

It is per asset. Each individual asset is assessed against the $20,000 threshold independently. You can buy ten qualifying assets in the same year and claim the instant write-off on each one, as long as each asset costs less than $20,000 ex-GST. There is no annual cap on total instant write-off claims.

What does “installed ready for use” mean exactly?

The asset must be physically at your business location, set up and capable of being used for its intended business purpose by 30 June 2026. Paying for an asset, ordering it, or receiving a delivery note before 30 June is not sufficient — the asset itself must be ready to use. Equipment still in transit, unboxed, or awaiting commissioning at year-end does not meet the test.

Do second-hand assets qualify?

Yes. The instant asset write-off applies to both new and second-hand assets purchased for business use. The same eligibility tests apply: cost below $20,000 ex-GST, aggregated turnover below $10 million, and installed ready for use by 30 June 2026. There is no requirement that the asset be unused or purchased from a dealer.

What if my asset costs $20,001 — can I still claim part of it?

No. The instant write-off is all-or-nothing. An asset costing $20,001 ex-GST does not qualify for any part of the instant write-off. The full cost is added to the small business simplified depreciation pool (15% deduction in year 1, then 30% per year on the diminishing balance) or depreciated under the general effective-life rules if you opt out of simplified depreciation.

Does the write-off apply to cars?

Yes, but only if the car’s cost is below $20,000 ex-GST. Most passenger cars cost significantly more than this, so in practice the instant write-off rarely applies to cars. Passenger cars are also subject to the ATO’s annual car cost limit, which caps the amount you can depreciate regardless of the purchase price. Commercial vehicles with a payload of 1 tonne or more are not subject to the car cost limit and can qualify if under $20,000.

Keep your asset records with Taxr

Claiming the instant asset write-off requires proof of purchase — the invoice showing the asset cost, the purchase date, and the supplier details. Taxr makes it simple: scan the invoice or receipt the moment you receive it, and it’s stored securely with the amount, date, and category automatically extracted.

At tax time, your accountant or tax agent needs to see that each asset was purchased, what it cost, and when it was ready for use. With Taxr, all of that is in one place — no chasing paper invoices or digging through email attachments in June.

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Last reviewed: 4 May 2026 (FY2025-26). The instant asset write-off threshold has changed several times in recent years — verify the current threshold and deadline against the ATO before relying on this tool.