Small businesses can immediately deduct the cost of eligible assets under the ATO instant asset write-off provisions.
Current Threshold
For the 2025-26 income year, the instant asset write-off threshold is $20,000 per asset. This means:
- Eligible businesses can immediately deduct assets costing $20,000 or less
- The limit applies per asset ??? you can write off multiple assets
- Assets costing more than $20,000 are depreciated over their effective life
Eligibility
To qualify, your business must:
- Have an aggregated turnover of less than $10 million
- Be a small business entity (sole trader, partnership, company, or trust)
- Use the asset primarily for business purposes
- Have purchased and first used (or installed ready for use) the asset between 1 July 2025 and 30 June 2026
What Assets Qualify?
- Office furniture and equipment
- Computers, laptops, and tablets
- Tools and machinery
- Vehicles (subject to luxury car depreciation limits)
- Manufacturing equipment
- Business-related software
Key Points
- The asset must be new or second-hand ??? both qualify
- If the asset is used partly for private purposes, only the business portion is deductible
- Demo vehicles and assets previously used for private purposes may not qualify
- Assets that previously formed part of a larger asset may not qualify