Instant asset write-off
A concession letting eligible small businesses deduct an asset's full cost immediately rather than depreciating it.
Normally business assets are depreciated over their effective life. The instant asset write-off lets eligible small businesses claim the entire cost in the year the asset is first used or installed ready for use.
The threshold has been $20,000 per asset for recent years, applied on a per-asset basis so multiple qualifying purchases can each be written off. Eligibility depends on aggregated turnover.
The concession has changed repeatedly, with thresholds rising and falling and periods of unlimited write-off during the pandemic. Always confirm the threshold for the specific income year before relying on it.
Immediate versus gradual
A $15,000 machine written off immediately gives the full deduction this year. Depreciated normally, the same asset might yield only a few thousand dollars of deduction in year one.
The bit people get wrong
It is a timing benefit, not free money. You still only ever deduct the cost once — you simply get it sooner. Buying assets you do not need to reduce tax leaves you poorer, not richer.
Common questions
What is the current threshold?
It has been $20,000 per asset for recent income years, subject to legislation each year. Confirm the figure for the relevant year before purchasing.
Does the asset have to be new?
Second-hand assets generally qualify for small businesses, provided they are used for a taxable purpose and installed ready for use within the year.
What if the asset costs more than the threshold?
It goes into the small business depreciation pool and is deducted over time at pool rates rather than immediately.