What is the instant asset write-off threshold for 2026?

The enacted $20,000 extension ended on 30 June 2026. The 2026-27 Federal Budget proposed a permanent threshold for eligible small businesses, but the Tax Reform No. 2 Bill remained before Parliament when reviewed on 9 August 2026. Confirm the legislation and ATO guidance in force before relying on a calculation.

How do I calculate my instant asset write-off tax saving?

Multiply the asset price (ex-GST) by your business use percentage, then multiply by your tax rate. For example: a $15,000 ute fitout, 100% business use, at a 25% company tax rate = $3,750 tax saving in Year 1. Use this calculator for your specific numbers.

Can I claim the $20k write-off on a financed asset?

Yes. If you finance the asset via chattel mortgage, you own the asset from settlement, so you can still claim the instant asset write-off in Year 1 — even though you haven't paid the full purchase price yet. Under a finance lease, you generally cannot claim the write-off (you don't own the asset).

What business use percentage should I use?

You can only claim deductions on the business-use portion of the asset. If a vehicle is used 80% for business and 20% for personal, your deductible amount is 80% of the asset cost. You must keep an ATO-compliant logbook for vehicles to substantiate your claim.

Does the write-off apply to used assets?

Yes. Both new and used assets can qualify for the instant asset write-off, provided they are below the threshold, used for a genuine business purpose, and first used or installed ready for use during the income year.

What if my asset costs more than $20,000?

Assets over $20,000 (ex-GST) cannot use the instant write-off and must be depreciated through the general small business pool. The deduction rate is 15% in the first year (half-year rule) and 30% in subsequent years under the diminishing value method. This calculator shows these figures for assets over $20k.

Can a sole trader use the instant asset write-off?

Yes. Sole traders, partnerships, trusts, and companies can all use the write-off — provided turnover is under $10M. For sole traders, the tax saving is at your marginal income tax rate, not a flat company rate.

Is this calculator legally accurate?

This calculator provides general estimates only. It uses simplified ATO rules for small business depreciation and should not be relied on as tax advice. Tax outcomes vary depending on your individual circumstances. Always consult a registered tax agent or accountant before making tax claims.

Instant Asset Write-Off Calculator 2026

Your Write-Off Savings Calculator

Asset Price (inc. GST if applicable)

Deposit / Trade-In ($)

Business Use %

Tax Rate %

Finance Structure

Loan Term (years)

Interest Rate % p.a.

GST Registered?

Yes — I can claim GST credits

Your Year 1 Tax Outcome

Year 1 Tax Saving

$4,090

GST Credit (BAS)

$1,636

Write-Off Amount

$16,364

Monthly Repayment

$323

Net Year 1 Cost

$2,146

Write-Off Type

Instant Write-Off

Asset price (inc. GST)$18,000

Less: GST credit receivable− $1,636

Less: Year 1 tax saving− $4,090

Year 1 repayments (if financed)$3,876

Net Year 1 out-of-pocket$2,146

✓ This asset qualifies for the full instant write-off — the entire cost (business-use portion) is deductible in Year 1.

Structure Comparison: Cash vs Chattel Mortgage vs Finance Lease

The table below shows how your Year 1 tax outcome differs depending on whether you pay cash or finance via chattel mortgage or finance lease.

Cash

Cash / Own Funds

Up-front cost$18,000

Write-off deduction$16,364

GST credit$1,636

Year 1 tax saving$4,090

Net cost Year 1$12,274

Best for tax

Chattel Mortgage

Deposit$0

Monthly repayment$323

Write-off deduction$16,364

GST credit$1,636

Year 1 tax saving$4,090

Net Year 1 cash out$2,146

Lease

Finance Lease

Monthly lease payment$327

Write-off deductionNot eligible

Annual deduction$3,924

Year 1 tax saving$981

Net Year 1 cash out$2,943

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How the Instant Asset Write-Off Works in 2026

The instant asset write-off can allow eligible small businesses to deduct the business-use portion of qualifying assets below the threshold in force when they are first used or installed ready for use. The 2026–27 Federal Budget proposes a permanent $20,000 threshold, but the relevant bill remained before Parliament when this page was reviewed. Treat the calculator result as a scenario, not an entitlement.

Proposed 2026–27 settings to model

Your aggregated annual turnover must be under $10 million
The asset must cost under $20,000 excluding GST (i.e. $21,999 inc. GST if you are GST-registered)
The proposed settings must first be enacted and apply when the asset is used or installed ready for use
Assets costing $20,000+ go into the small business depreciation pool (15% in Year 1, 30% per year thereafter)
Private-use portions are excluded — only the business-use % is deductible
Multiple assets under $20,000 each all qualify — there is no cap on the number of assets

Chattel mortgage vs finance lease: the write-off difference

Ownership and tax treatment differ by contract. A chattel mortgage may allow the business to claim depreciation or an available immediate deduction where all eligibility requirements are met. Under a finance lease, the lessor generally owns the asset during the term and the lessee’s deductions are determined under the applicable tax rules. Confirm both structures with a registered tax adviser.

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Three worked examples

Asset	Price (inc. GST)	Write-off amount	Tax saving (25%)	After GST credit
Ute fitout & toolboxes	$16,500	$15,000	$3,750	$5,250 benefit
Pressure washer	$8,800	$8,000	$2,000	$2,800 benefit
Trailer (business-use)	$19,800	$18,000	$4,500	$6,300 benefit

Assumes 100% business use, GST-registered, 25% small company tax rate. "Benefit" = tax saving + GST credit combined.

Instant Asset Write-Off FAQ

What is the threshold in 2026?▼

The 2026–27 Budget proposes a permanent $20,000 threshold, but the proposal was not yet law when reviewed on 9 August 2026. If enacted as proposed, the cost must be less than $20,000 under the applicable GST rules. Confirm current law and the asset’s tax cost with an adviser.

Can I claim on a financed asset?▼

Yes — if you finance via chattel mortgage (you own it from day one). Finance lease does not qualify as the lender retains ownership. Operating lease also does not qualify.

Does this apply to used assets?▼

Yes. Both new and second-hand assets qualify, provided they are below the threshold and used for business.

Can I buy multiple assets?▼

Yes. Each individual asset under $20,000 qualifies separately. A $19k trailer AND a $15k compressor both gain the write-off independently.

What if my asset is over $20,000?▼

Assets $20,000+ go into the small business general pool: 15% in Year 1 (half-year rule) and 30% per year diminishing value from Year 2 onwards. The calculator above shows these figures when you enter a price over $22,000 inc. GST.

Do I need an ABN?▼

Yes. You must be carrying on a business with an active ABN and with aggregated annual turnover under $10 million.

Instant Asset Write-Off Calculator 2026

Your Write-Off Savings Calculator

Your Year 1 Tax Outcome

Structure Comparison: Cash vs Chattel Mortgage vs Finance Lease

Cash / Own Funds

Chattel Mortgage

Finance Lease

Ready to finance your asset? Get matched to finance options from our panel.

How the Instant Asset Write-Off Works in 2026

Proposed 2026–27 settings to model

Chattel mortgage vs finance lease: the write-off difference

Want to know what this means for your asset?

Three worked examples

Instant Asset Write-Off FAQ

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