Instant asset write-off
Immediately deduct an eligible asset instead of depreciating it.
The instant asset write-off lets eligible small businesses claim the full cost of a qualifying asset in the year they start using it, instead of depreciating it over years. It brings the whole deduction forward, which lowers that year’s taxable income. The cost threshold and eligibility are set by the government and can change each year.
The threshold applies per asset rather than as a yearly total, and the test is the cost of the asset itself. Because the figure and the eligibility rules are set in each Budget and have moved repeatedly, check the current threshold with the ATO before relying on it — this entry deliberately does not name one, since a stale number here would be worse than none.
Worked example
Two businesses each buy a qualifying $4,000 machine. One writes it off immediately and reduces this year’s taxable income by $4,000. The other depreciates it over four years at $1,000 a year. Both eventually deduct $4,000 — the write-off changes WHEN the deduction lands, not how much of it you get.
Common mistake
Buying something in June purely to claim it. The deduction is worth your marginal rate on the cost, not the cost — spending $4,000 to save perhaps $1,300 only makes sense if the asset was needed anyway. The write-off is good timing on a purchase you were making, not a reason to make one.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Depreciation (decline in value)
Claiming the cost of a big asset gradually over its life.
Effective life
How many years an asset is expected to be used — the base of every depreciation rate.
Sole trader
The simplest business structure — you and the business are one.
Logbook method (car expenses)
Claim your car’s real business-use share of running costs.
← Back to the full glossary.
Questions about this term
Instant asset write-off: common questions
- Why doesn’t this entry state the write-off threshold?
- Because it moves. The cost threshold and the eligibility rules are set in each Budget and have changed repeatedly, so a figure written here would go stale — and a stale number is worse than none. Check the current threshold with the ATO before relying on it; the test is the cost of each asset, not a yearly total.
- Does the write-off give me a bigger deduction than depreciating?
- No — it changes when the deduction lands, not how much you get. Two businesses each buying a qualifying $4,000 machine both eventually deduct $4,000; one takes it all this year, the other takes $1,000 a year over four years. The write-off lowers this year’s taxable income sooner, and that timing is the whole benefit.
- Is it worth buying equipment in June just to claim the write-off?
- Generally only if you needed the asset anyway. The deduction is worth your marginal rate on the cost, not the cost itself — spending $4,000 to save perhaps $1,300 is a poor trade for something you would not otherwise buy. The write-off is good timing on a purchase you were making, not a reason to make one.
- Does the write-off threshold apply per asset or to my total spending?
- Per asset. The test is the cost of the asset itself, so each qualifying purchase is measured on its own against the threshold rather than added up across the year. Once an asset qualifies, its full cost is claimed in the year you start using it; anything that does not qualify goes on the asset register and is depreciated over its effective life.
Let Fin handle the jargon for you
Connect your bank and Fin sorts your income, expenses and GST automatically — so terms like this just become numbers that are already worked out. Free to start, no card needed.
Get 2Fin free →