Where the threshold stands for 2026-27
This is the part most pages get wrong, so it is worth being precise. The $20,000 instant asset write-off was always temporary. It covered assets first used or installed ready for use up to 30 June 2026, and it expired on that date. Nothing has replaced it. When the temporary threshold lapses, the figure reverts to the statutory default in section 328-180 of the ITAA 1997, which is $1,000. That is the number your 2026-27 claim is tested against today.
A permanent $20,000 threshold was announced in the 2026-27 Budget. The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 would deliver it. That bill has not passed the House or the Senate. It is with the Senate Economics Committee, which reports on 13 August 2026. The ATO says of the measure, in its own words, that it is not yet law.
So the calculator defaults to $1,000 and offers $20,000 as a clearly labelled what-if. If you are timing a purchase around the higher threshold, treat it as a bet on the bill passing, not as a rule you can already claim under. Worth a word with your tax agent before you commit to the spend.
How the write-off works when your asset qualifies
The write-off lets an eligible small business deduct the full business-use cost of an asset in the year it is first used, rather than depreciating it slowly over its effective life. The limit applies per asset, so you can write off several assets in one year as long as each is under it. To qualify, your business needs an aggregated turnover under $10 million and must use the simplified depreciation rules, and the asset has to be first used or installed ready for use for a taxable purpose in the year you claim. The threshold test is done GST-exclusive if you are registered for GST, because you claim the GST back as a credit.
A worked example
Say you buy an $800 tool, you are registered for GST, and you use it 80% for business. The GST-exclusive cost is $800 divided by 1.1, which is $727.27. That is under $1,000, so it qualifies. Your immediate deduction is $727.27 multiplied by 80%, which is $581.82. If your tax rate is 25%, that deduction saves you $581.82 multiplied by 0.25, which is $145.45 in tax. The deduction lowers your taxable income, it is not a cash refund.
What if the asset costs more than the threshold?
Then it does not get the instant write-off. You depreciate it over its effective life, or add it to your small business general pool and claim 15% in the first year and 30% each year after. You still get the full deduction over time, it is just spread out. At a $1,000 threshold that covers a lot more of what a small business buys than it did last year, which is the practical sting of the reversion. The depreciation calculator works out the yearly amount by both ATO methods. Cars have their own separate limit on top of this.
Frequently asked questions
What is the instant asset write-off threshold for 2026-27?
By current law it is $1,000 per asset, GST-exclusive. The $20,000 threshold was temporary and covered assets first used or installed ready for use up to 30 June 2026. It expired on that date, and with nothing in force to replace it the threshold falls back to the statutory default in section 328-180 of the ITAA 1997, which is $1,000. A permanent $20,000 threshold was announced in the 2026-27 Budget, but the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 has not passed either house. It is before the Senate Economics Committee, which reports on 13 August 2026. The ATO's own wording on the measure is that it is not yet law.
How does the instant asset write-off work?
Instead of depreciating an eligible asset over its effective life, you deduct the whole business-use portion in the year you first use it or install it ready for use. The limit applies per asset, so you can write off several assets in the same year. The deduction reduces your taxable income, so what you save is the deduction multiplied by your tax rate. Enter the cost, your business-use share and your rate above to see both figures. The calculator runs on the $1,000 current-law threshold by default and lets you switch to the announced $20,000 as a what-if.
Is the $20,000 instant asset write-off coming back?
It may, but it is not back yet. The 2026-27 Budget announced a permanent $20,000 threshold, and the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 would give effect to it. That bill has not passed the House or the Senate. It sits with the Senate Economics Committee, reporting 13 August 2026, so nothing is settled before then. Until it passes and receives assent, $1,000 is the threshold you can actually claim against. If you are timing a purchase around the higher figure, that is a real risk to weigh rather than an assumption to make.
What are the rules for the instant asset write-off?
Three main tests. First, your business must be a small business with aggregated turnover under $10 million and use simplified depreciation. Second, each asset must cost less than the threshold, which is $1,000 for 2026-27 by current law, tested GST-exclusive if you are registered for GST. Third, the asset must be first used or installed ready for use for a taxable purpose in the income year you claim it. You claim only the business-use portion. Cars have a separate car limit that this calculator does not model.
Is the cost tested GST-inclusive or GST-exclusive?
If you are registered for GST you claim the GST back as a credit, so the write-off cost, and the threshold test, use the GST-exclusive amount. A $1,080 GST-inclusive tool is about $982 excluding GST, which is under the $1,000 limit and qualifies. If you are not registered for GST, you cannot claim the credit, so the cost including GST is what counts. This calculator handles both: pick whether you are registered and whether the figure you entered includes GST.
What happens if the asset costs more than the threshold?
It does not qualify for the instant write-off. Instead you depreciate it over its effective life, or add it to your small business general pool and claim it at the pool rates (15% in the first year, 30% after that). You still get the deduction, it is just spread across several years rather than claimed all at once. Use the depreciation calculator to work out the yearly amount.
This tool is general information, not tax advice. Thresholds and eligibility change year to year. Check your situation with the ATO or a registered tax agent before you claim.
