The instant asset write-off allows eligible Australian small businesses to immediately deduct the cost of new or second-hand assets in the income year they are first used or installed ready for use, rather than depreciating them over several years.
For the 2025-26 income year, businesses with an aggregated annual turnover under $10 million can instantly write off assets costing less than $20,000 each (this threshold has changed frequently — always verify the current limit at ato.gov.au before making purchase decisions). Each asset is assessed individually, so you can write off multiple items in the same year as long as each one is under the threshold.
Eligible assets include tools, equipment, computers, office furniture, vehicles (subject to the car cost limit for passenger vehicles — $68,108 for 2025-26), and any other depreciable asset used for business purposes. The asset must be used or installed ready for use by 30 June of the relevant income year.
Assets above the threshold are placed into the small business simplified depreciation pool, which depreciates at 15% in the first year and 30% per year thereafter. If your pool balance falls below the instant asset write-off threshold at the end of an income year, you can deduct the entire remaining balance.