Managing a small business in Australia is no easy task. You’re juggling suppliers, staff, deadlines, and somehow expected to keep up with every tax update the ATO rolls out. So, here’s one you really don’t want to miss: the $20,000 instant asset write-off has been extended, and it could mean serious savings for your business.
If you’re eligible and don’t take advantage of it, you might end up paying more tax than you need to.
What is the $20,000 Instant Asset Write-Off?
The government recently extended this measure for another 12 months, and it’s already law. If your business has an annual turnover under $10 million, you can deduct the full cost of any eligible depreciating asset that costs less than $20,000.
And no, you don’t have to claim it over several years. You can write it off in one go, within the same financial year the asset is first used or installed ready for use.
Let’s say you purchase a commercial fridge for your café for $18,000. Instead of depreciating it gradually, you can deduct the full amount straight away. That’s a significant saving, and it directly improves your cash flow.
What If You Already Claimed the Asset Before?
If you’ve previously claimed an asset under the simplified depreciation rules, and you’re now adding to or upgrading that asset, some additional costs might also be deductible—but only if they meet specific conditions. For example, the added cost must be the first one incurred after the asset was originally written off, and it must be under $20,000.
These second-element costs are often overlooked, but they still qualify under the same rules.
What If the Asset Costs More Than $20,000?
You’re not excluded entirely. Assets costing $20,000 or more can still be placed in the small business simplified depreciation pool. This lets you claim 15% in the first year and 30% each year after.
And if your depreciation pool balance is below $20,000 at the end of the 2024–25 income year? You can write off the entire remaining balance.
Why Should This Matter to You?
Because too many businesses miss out on deductions they’re entitled to simply because they didn’t act in time, or they assumed their accountant would automatically pick it up. But if you don’t bring it up, it may not be claimed — and that could mean paying more tax than necessary.
Think about it. How many assets have you bought for under $20,000 recently? A new laptop, some shelving, or maybe updated point-of-sale equipment? If you’re not claiming them under this scheme, you’re leaving valuable deductions untouched.
What Kind of Assets Qualify?
The write-off applies to most business-use depreciating assets under $20,000. This includes tools, computers, office furniture, work vehicles and more. The key is that the asset must be used (or be ready to use) between 1 July 2024 and 30 June 2025.
If you’re planning to upgrade equipment or make purchases before the end of the financial year, consider the timing. Buying just after the cut-off date could mean waiting years to see the full tax benefit.
What Should You Do Now?
Here’s how to make the most of this opportunity:
- Review your asset purchases: anything under $20,000 should be considered.
- Speak with your accountant: don’t wait until tax time to raise it.
- Check your timing: to qualify, assets must be ready for use by 30 June 2025.
- Keep records: detailed receipts and usage documentation will be essential if the ATO asks.
A Word of Caution
While this is a great benefit, it’s not a reason to spend money on things your business doesn’t need. Don’t fall into the trap of buying something purely for the deduction. The asset should make financial and operational sense for your business.
Final Thoughts
The $20,000 instant asset write-off is simple, practical, and available now — but only until 30 June 2025. It’s one of the most direct ways the government is supporting small businesses, and it’s designed to help you reinvest in your operations.
If you’re eligible and you haven’t made use of it yet, now is the time to act. Otherwise, you could be leaving thousands of dollars on the table.
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