$20,000 Instant Asset Write off is now law (2025 to 26) what it means for small business

Sue Gordon

The $20,000 instant asset write off is now law for the 2025 to 26 financial year. If you are planning equipment or technology purchases, this is one of the easiest opportunities to reduce taxable income (if you are eligible).

Who is eligible

Small businesses with annual turnover of less than $10 million may be able to immediately deduct the business portion of eligible assets that cost under $20,000.

What you can claim

You may be able to claim an immediate deduction for eligible assets that are:

Under $20,000 per asset (the threshold applies per asset, not per purchase)
New or second hand
Used for business (you can only claim the business use portion)

Because the threshold applies per asset, you may be able to claim multiple assets as long as each one is under $20,000.

The timing rule (this is the part people miss)

To be eligible, the asset must be first used or installed and ready for business use between 1 July 2025 and 30 June 2026.

Record keeping still matters

Normal deduction rules still apply, and you will need records to support:

The purchase
The date the asset was installed and ready for use
The business use percentage

For the official ATO guidance, see: Instant asset write off for eligible businesses | Australian Taxation Office.

The role of your bookkeeper

Your bookkeeper helps make sure asset purchases are captured correctly during the year, including the right dates and amounts.

A key point: in most cases, assets should still be coded to a fixed asset account, even if they cost less than $20,000. The instant asset write off is a tax decision made by your accountant, not a bookkeeping decision.

At year end, your bookkeeper can flag relevant asset purchases for your accountant so they can assess eligibility and apply any deductions correctly in your tax return.

Reach out today for an obligation free discussion on how we can help your business