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Can you write this asset off now?

The $20,000 instant asset write-off is permanent from 1 July 2026 — no expiry, so the annual “has it been extended?” question is finished. This checks one asset against the limit, handles the GST step that decides borderline cases, and shows what happens to an asset that misses.

Checked against the ATO

Checked against the legislation — how we check.

Includes connected and affiliated entities, not just this business. Must be under $10,000,000.

Deductible this income year

$5,909.09

Written off in full.

How it is tested

Cost entered you entered$6,500.00
GST removed−$590.91
Cost tested against $20,000$5,909.09
    The cost tested against the $20,000 limit

    One asset against the limit. It does not apportion private use, handle trade-ins or the car limit, or decide whether something is a depreciating asset. General information, not tax advice.

    It is permanent now, and that is the news

    For years this was a temporary measure renewed in blocks, and the honest answer every June was “wait and see”. That era has ended. The $20,000 limit applies from 1 July 2026 with no expiry date attached to it.

    The dates, because a claim like that should carry them. The measure was announced on 12 May 2026 in the 2026–27 Budget. The Treasury Laws Amendment (Tax Reform No. 2) Act 2026 passed both Houses on 19 August 2026 and received royal assent on 26 August 2026, as No. 71 of 2026. The ATO’s new-legislation page states it in four words: “This measure is now law.”

    One older rule is still temporary and worth knowing if you have opted out before. The provision preventing a small business from re-entering the simplified depreciation regime for five years after opting out stays suspended until 30 June 2027.

    Per asset, not per year

    This is the point most pages get wrong, and it is worth a lot of money. The ATO’s wording: “The $20,000 limit under the measure applies on a per asset basis, so small businesses can instantly write off multiple assets.” There is no annual ceiling on the number of assets. Four tools at $9,000 each are four separate write-offs, not one $36,000 claim that breaches something.

    The GST step that decides borderline cases

    A business registered for GST that can claim a full credit tests the GST-exclusive cost. The ATO: “If your business is registered for GST and can claim a full GST credit on the purchase of an asset, you exclude the GST amount paid when calculating the asset’s cost for depreciation purposes.”

    That decides cases on the wrong side of the line. An asset advertised at $21,000 including GST is $19,090.91 excluding it — under the limit, and therefore an immediate deduction. Read the sticker price instead and you would file it in the pool for a decade. If you are not registered, or cannot claim a full credit, the amount you actually paid is the amount tested. The GST calculator does the one-eleventh arithmetic if you need to see it.

    What happens to an asset that misses

    Nothing is lost. An asset at or above $20,000 goes into the small business pool and is deducted at 15% in the first income year and 30% each income year after that. When the pool’s closing balance falls under $20,000, the whole remainder is written off that year — which is why the tail does not run forever.

    A $45,000 asset, as an example, clears in 3 income years:

    Small business pool decline for a $45,000 asset
    Income yearOpeningRateDeductionClosing
    1$45,000.0015%$6,750.00$38,250.00
    2$38,250.0030%$11,475.00$26,775.00
    3$26,775.00balance written off$26,775.00$0.00

    The excluded classes

    A short list sits outside the simplified depreciation rules altogether. For these the cost is not the deciding factor — the general depreciation rules apply however cheap the asset is.

    • Assets leased out, or expected to be, for more than 50% of the time on a depreciating asset lease
    • Assets used in your research and development activities
    • Assets you allocated to a low-value assets pool before using the simplified depreciation rules
    • Capital works, including buildings and structural improvements
    • Horticultural plants, including grapevines
    • Software allocated to a software development pool (but not other software)

    Frequently asked questions

    Is the instant asset write-off still available?
    Yes. The more useful question now is which income year a purchase lands in, because that is what people get wrong once the deadline pressure is off. The test is when the asset is first used or installed ready for use — not when you ordered it, not when you paid, and not the invoice date. A machine paid for in June that is still in its crate on 30 June belongs to the following income year. That timing question used to be urgent because the limit was about to drop; it is still the question, it just no longer decides whether you get the deduction at all.
    Is the $20,000 a limit per asset or for the year?
    Per asset — and the clearest way to see what that means is to spend the same money three ways. Spend $36,000 on four separate $9,000 assets and all four are written off immediately. Spend it on two $18,000 assets and both are. Spend it on one $36,000 asset and none of it is, because that single asset is over the limit; it goes to the pool instead and comes back to you over several years. Same money, three different answers, and the only variable is how the spend is split across assets rather than how much of it there is.
    Does the $20,000 include GST?
    It depends on whether you can claim the GST back, and the two cases give opposite answers on the same asset. A business that is not registered for GST cannot claim the credit, so the GST is part of what the asset cost it — the full amount on the invoice is what gets tested. The same purchase by a registered business claiming a full credit is tested without the GST, because the credit refunds that part. This is why two businesses can buy the identical item on the same day and only one of them writes it off. The condition is a full credit: where an asset is only partly creditable, or partly private, the cost is not simply the invoice figure and this checker will not give you the right answer.
    What if the asset costs exactly $20,000?
    It misses. The test is "costing less than $20,000", so $19,999.99 qualifies and $20,000.00 does not. It goes into the small business pool instead, where it is deducted at 15% in the first income year and 30% each year after — you do not lose the deduction, you spread it.
    Who can use it?
    Small businesses with an aggregated turnover of less than $10 million. Aggregated turnover counts connected and affiliated entities, not just the one buying the asset, which catches out group structures. At $10 million or more the simplified depreciation rules do not apply at all, so neither does this.
    What is excluded?
    A short list of asset classes sits outside the simplified depreciation rules entirely, and for those the cost is not the deciding factor: assets leased out for more than half the time on a depreciating asset lease, assets used in R&D activities, assets allocated to a low-value pool before you started using simplified depreciation, capital works including buildings and structural improvements, horticultural plants including grapevines, and software allocated to a software development pool. Other software is fine.
    What this page does not do
    It checks one asset against the limit. It does not decide whether an asset is a depreciating asset at all, apportion business versus private use, handle trade-ins or the car limit, or work out the second-element cost rules for improvements to an asset you already wrote off. It also does not know your aggregated turnover — that figure includes connected and affiliated entities, and getting it wrong changes the answer.

    Sources

    Checked 2026-09-02. How every figure on this site is verified is set out on the methodology page.