Instant write-off deduction and tax saved.
Tax saved this year
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Immediate deduction
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Deduct it now, not over a decade
Normally when a business buys equipment, the cost is written off slowly through depreciation over the asset's effective life, which can stretch across many years. The instant asset write off short circuits that. If your business is eligible and the asset costs under the threshold, you claim the entire cost as a deduction in the year you first use it or have it installed ready for use. This calculator takes the asset cost, the threshold, and your business tax rate, and tells you the deduction and the tax it saves in that first year.
The cash flow benefit is the whole point. Bringing the deduction forward does not change the total amount you eventually deduct, it changes the timing, putting the tax saving in your pocket now rather than dribbling it out over several returns. For a small business managing working capital, that timing is often worth more than the headline figure suggests.
A threshold that keeps moving
Here is the part that trips people up. The write off threshold has changed repeatedly over recent years, and its status for 2025-26 has been genuinely unsettled, which is exactly why this tool makes the threshold an input you set rather than a fixed number. Before you rely on a deduction, confirm the current threshold and the eligibility rules on the ATO website or with your accountant. Eligibility generally requires aggregated business turnover under $10 million, and the asset must be first used or installed ready for use within the income year. Enter the figure that applies to your year, not a number you half remember from a budget announcement.
An $18,000 ute fit-out against a $20,000 threshold
Say a sole trader operating as a small business buys $18,000 of equipment excluding GST, the threshold is set at $20,000, and the business rate is 25 percent, the small business company rate. The asset costs under the threshold, so the full amount is deductible now.
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The deduction saves $4,500 in tax this year, so the equipment effectively costs the business $13,500 after tax. Note the strict comparison the tool uses: the cost must be under the threshold. An asset priced at exactly $20,000 does not qualify and must be depreciated normally, so a supplier nudging a quote from $19,990 up to $20,000 can quietly cost you the entire immediate deduction.
Who benefits, and the GST trap
This suits small businesses making genuine equipment purchases they need anyway. It is not a reason to buy things you do not need, because a deduction only ever returns a fraction of the spend, here 25 cents in the dollar. The most common error is entering the GST inclusive price. If you are registered for GST and claim the input tax credit, the cost for write off purposes is the GST exclusive amount, which is what the calculator expects. Another judgement call: if your business made a loss, a large deduction may simply increase a carried forward loss rather than produce a refund this year, so the saving can be deferred in practice.
Two eligibility tests people skip
Beyond the cost being under the threshold, two conditions decide whether you actually qualify. First, the turnover test: the write off is for small businesses, and eligibility has generally required aggregated annual turnover under $10 million, which counts connected and affiliated entities, not just the one business. Second, the timing test: the asset must be first used or installed ready for use within the income year, not merely ordered or paid for. A machine sitting in a crate on 30 June, uninstalled, does not earn you the deduction that year. Both tests trip up businesses that assume a purchase date alone is enough, so confirm where your turnover sits and that the asset is genuinely in service before year end.
Can I write off several assets in the same year?
Yes. The threshold applies per asset, not to your total spend, so a business can immediately deduct multiple eligible items as long as each one individually costs under the threshold. Five tools at $4,000 each are all deductible, even though they total $20,000, because the test is applied to each asset separately.
What happens to assets over the threshold?
Assets at or above the threshold go into the normal depreciation rules and are written off over their effective life. Small businesses using simplified depreciation typically allocate them to a small business pool, which is depreciated at set rates each year. Confirm the current pooling and write off rules with the ATO, since these have shifted alongside the threshold itself.