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Small business guide

The $20,000 instant asset write-off: how it works from 2026

Updated 3 October 2026. From the ATO, ASIC and business.gov.au, linked at the end. General information only, not advice for your business.

By Nicholas Reid, Founder, FIZO

How this guide is written: facts only from the named public sources below. FIZO does not give financial advice.

The short answer

$20,000

Small businesses with aggregated turnover under $10 million can immediately deduct the business portion of each asset that costs less than $20,000. From 1 July 2026 this is permanent law12.

Who can use it

  • Businesses with aggregated turnover under $10 million1.
  • For assets that each cost less than $20,000. The limit applies per asset, so you can write off several1.
  • Only the business-use portion of an asset can be deducted.

What has changed

Assets costing $20,000 or more go into the small business simplified depreciation pool instead1. The rule that locks a business out of simplified depreciation for five years after leaving it is suspended until 30 June 20271.

YearThresholdStatus
2025-26$20,000Law1
From 1 July 2026$20,000Permanent, now law12

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An example

Example only, not advice. A cafe with turnover of $600,000 buys a coffee machine for $8,000 and uses it only for the business. It can deduct the full $8,000 in the year the machine is first used or installed ready for use, instead of spreading it over several years. A write-off reduces taxable income: it is not a refund of the $8,000.

Who can help

AccountantsTax planning around purchasesTax agentsClaim it correctly in your returnBookkeepersRecord assets properly in the booksBusiness finance brokersEquipment or vehicle finance for the purchase

Questions people ask

Is the $20,000 instant asset write-off permanent?

Yes. From 1 July 2026 the $20,000 threshold is permanent and is now law12.

Is the $20,000 limit per asset or in total?

Per asset. Each asset must cost less than $20,0001.

What turnover do I need to be under?

Aggregated turnover under $10 million1.

What happens to an asset that costs $20,000 or more?

It goes into the small business simplified depreciation pool and is deducted over time1.

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Sources

  1. ATO, $20,000 instant asset write-off
  2. ATO newsroom, $20,000 instant asset write-off here to stay (4 Sep 2026)

FIZO is a directory, not a tax or legal adviser. Rules and thresholds change: check the source, or ask a registered professional about your own business.