Great news for small business owners — the Australian Taxation Office (ATO) has confirmed that the $20,000 instant asset write‑off has been extended for the 2025–26 financial year.
This extension is now law and gives eligible small businesses extra cash‑flow support and an incentive to invest in tools, equipment and technology that help grow your business.
What this means for your business
If your business has an aggregated annual turnover of less than $10 million, you can now immediately deduct the full business portion of eligible assets that:
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Cost less than $20,000 (before GST for GST‑registered businesses)
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Were first used or installed and ready for use between 1 July 2025 and 30 June 2026
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Are used for a taxable purpose in your business
This write‑off applies per asset, so you can claim multiple eligible assets in your tax return — as long as each one is below the $20,000 threshold.
What happens with assets $20,000 or more?
Assets that cost $20,000 or more can still be claimed, but instead of an immediate deduction, they go into the small business simplified depreciation pool. From there:
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You can claim 15% of the pool balance in the first income year
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Then 30% in each later income year
Why this matters
This extension gives small businesses more flexibility with tax planning and cash flow; especially if you’re buying equipment, tools, tech or vehicles that help you operate more efficiently. Claiming these deductions sooner can help reduce your taxable income in the year the asset is first used.
Getting this tax benefit is simpler than you might think:
Check your eligibility – Your business needs a turnover under $10 million and the asset must be used for business purposes.
Pick your assets – Choose eligible items under $20,000 (before GST if you’re registered). Think tools, equipment, or tech that helps your business run smoother.
Keep the receipts – Keep records of purchase and installation dates. You’ll need them when lodging your tax return.
Claim in your tax return – The deduction is applied in the year the asset is first used or installed and ready for use.
If your unsure which assets qualify or how to claim, chat with your bookkeeper or accountant – they can help you maximise your deduction and boost cash flow.
Don’t miss out > this write-off can make a real difference for your business in 2025–26!