Instant asset write-off 2025 for small business
How the $20,000 instant asset write-off works for eligible small businesses and which invoice details to keep.
The instant asset write-off lets an eligible small business claim a deduction for the full cost of a depreciating asset in the year the asset is first used or installed ready for use. For the 2024-25 and 2025-26 income years, the threshold is $20,000 per asset for businesses with aggregated turnover below $10 million. The cost is generally the GST-exclusive amount if you can claim a GST credit. Assets that cost $20,000 or more can go into the small business simplified depreciation pool. The 2026-27 Budget announced that the $20,000 threshold would continue from 1 July 2026, so check the ATO page for the current legislative status. Keep the supplier tax invoice for each asset. 4invoices is for the invoices you issue and it does not track assets, so use accounting software or your tax agent for the deduction.
- $20,000 per asset for eligible small businesses in 2024-25 and 2025-26.
- Aggregated turnover must be below $10 million.
- The asset must be first used or installed ready for use in the income year.
- 4invoices does not have an asset register or tax return features.
How it works
Check that your business qualifies. The turnover test includes connected and affiliated entities.
Check the cost of each asset against the threshold. The limit applies to each asset, not to the whole invoice.
Keep the supplier's tax invoice and proof of when you first used the asset.
Claim the deduction in your tax return. Your tax agent or accounting software records the asset and the claim.
Legal references
- Income Tax Assessment Act 1997 - small business entity depreciation rules.
- Australian Taxation Office - instant asset write-off guidance for small business.
- Australian Government 2026-27 Budget - announcement on the instant asset write-off from 1 July 2026.
Frequently asked questions
What is the instant asset write-off threshold for 2025?
It is $20,000 per asset for the 2024-25 and 2025-26 income years for small businesses with aggregated turnover below $10 million. Check the ATO page for later years.
Who can claim it?
Small businesses with aggregated turnover under $10 million. Turnover includes connected and affiliated entities, so a small company in a larger group may not qualify.
Does it apply to second-hand assets?
Yes, second-hand assets can qualify if they meet the same tests. Check the ATO conditions for your case.
Can 4invoices record the asset or claim the deduction?
No. 4invoices creates the invoices you issue. It has no asset register and does not prepare tax returns.