If your business has been holding off on a piece of equipment, the next few weeks are worth your attention. The $20,000 instant asset write-off is law for the 2025-26 financial year, and the window closes on 30 June 2026.
Here is what it is, who can use it and why the timing is sharper than usual this year.
What the instant asset write-off actually does
Normally, when a business buys an asset, you claim the cost as a deduction slowly over several years through depreciation. The instant asset write-off lets eligible small businesses deduct the full business-use portion of an eligible asset in the year it is first used or installed, rather than spreading it out.
For FY2025-26 the threshold is $20,000. The deduction applies per asset, so a business buying several qualifying items can write off each one, as long as each costs less than $20,000.
Who is eligible
Three tests generally have to be met.
- Your aggregated annual turnover is under $10M.
- The asset costs less than $20,000 (the GST-exclusive amount if you are registered for GST).
- The asset is first used, or installed ready for use, between 1 July 2025 and 30 June 2026.
If an asset costs $20,000 or more, it does not get the instant write-off. Instead it goes into the small business general pool and is deducted at 15% in the first year and 30% in each year after.
Why the timing matters this year
The $20,000 threshold is legislated for FY2025-26 only. From 1 July 2026 it reverts to $1,000 unless the government legislates an extension. As at the date of this article, no higher figure for 2026-27 is law.
That makes the period before 30 June 2026 a genuine window rather than a permanent feature. A planned purchase brought forward into this financial year locks in the deduction at the higher threshold. The same purchase made on 1 July 2026 may only attract a $1,000 instant deduction.
A worked example
Take a business with $850,000 turnover that buys a $14,500 piece of equipment used wholly for the business, installed in May 2026.
- The asset is under $20,000 and turnover is under $10M, so it qualifies.
- The business deducts the full $14,500 this year.
- At a 25% company tax rate, that deduction reduces tax by about $3,625.
The figures change with your tax rate and business-use percentage, but the shape is the same: the deduction is immediate, not spread over years.
You can run your own numbers on the Foothold Advisory instant asset write-off calculator.
A sensible word of caution
A deduction is not a discount. Writing off an asset reduces your taxable income, it does not pay for the asset. The decision still has to make commercial sense on its own. Buying equipment you do not need to save tax leaves you worse off in cash terms.
The write-off is most useful when you were going to make the purchase anyway and the timing is flexible.
Before you act
Eligibility depends on the specific asset and your full circumstances, and the rules carry detail this article does not cover (cars have their own limit, second-hand assets, the timing of “installed ready for use”). Confirm your position with a registered tax agent and check the current threshold on the ATO before you commit.
If you would like a plain-English read on which EOFY moves are worth checking for your business, the Foothold Advisory EOFY 2026 tax-saving checklist is a good place to start.
General information only. This article provides general information about Australian tax concepts and is current as at 3 June 2026. It does not take into account your objectives, financial situation or needs, and it is not tax advice. Foothold Advisory is not a registered tax agent. Tax laws change and apply differently depending on your circumstances. Before acting, obtain advice tailored to your situation from a registered tax agent, and verify all figures against the ATO.