Big Gear, Big Claims – Capital Equipment Rules for Freelancers
Updated: 05/10/25 • Reviewed by: GoTax Publishing
Capital equipment purchases can save you big at tax time — if you claim them right. In 2025, ABN holders may use instant asset write-off for assets under the threshold, while employees stick to depreciation. Knowing which bucket you fall into can mean the difference between a refund boost and an ATO headache.
When Your Tools Cost More Than Your Holiday
Cameras, computers, ride-on mowers — freelancers and tradies often spend big to keep their business humming. But here’s the kicker: how you claim it depends on who you are.
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Employees: small stuff (<$300) instantly; bigger stuff = depreciation only.
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ABN holders: instant asset write-off for assets under the threshold, depreciation for the rest.
Get it wrong, and the ATO will be quicker on you than a seagull on hot chips.
If You’re an ABN Holder (Freelancers, Tradies, Rideshare, Small Biz)
1. Instant Asset Write-Off – The Fast Track
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Threshold expected around $20,000 in 2025.
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Deduct the full cost in the year of purchase, if used or ready for use by 30 June.
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Covers new and second-hand assets.
Example – Tradie:
Mick the carpenter buys a $12,000 saw. Claims the whole $12,000 this year. At 30% tax rate → $3,600 saved.
Example – Freelancer:
Sophie the graphic designer upgrades to a $6,000 iMac and $3,000 software licence. Total $9,000 → instantly deductible. Refund saving: $2,700.
2. Depreciation – The Long Game
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For assets over the threshold.
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Deducted over the asset’s “effective life.”
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Common method: diminishing value (bigger claims upfront).
Example – Rideshare Driver:
Jo buys a $40,000 car for Uber. Business use = 70%. Deducts ~$4,000 in year one, then less each year until written off.
3. Pooling Small Assets
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Small business entities can pool assets under the cap and depreciate them together.
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Speeds up claims while keeping records tidy.
If You’re an Employee (PAYG, no ABN)
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No instant asset write-off.
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Anything ≤$300 = immediate deduction.
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Anything > $300 = depreciated over effective life.
Example – Employee Teacher:
Liam buys a $1,200 laptop for lesson planning. Claims ~$320 per year over 3 years.
EOFY Timing – Buy Smart, Not Random
Biggest freelancer tip? Plan purchases before 30 June.
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Buy gear late in the financial year → full write-off applies this year.
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Wait until July → you delay the refund for a whole 12 months.
Example:
Sophie (designer) bought her $6,000 iMac on 29 June. Full deduction in 2025. Had she waited until 1 July, the deduction would be locked into 2026. That’s a whole year without her $1,950 refund boost.
Moral: don’t just buy for tax — but if you need it, time it right.
Comparison Table – Who Gets What
| Item Purchased | Cost | Claim Method | Who Can Claim | Deduction Year 1 |
|---|---|---|---|---|
| Saw (tradie) | $12,000 | Instant write-off | ABN Holder | $12,000 |
| iMac + software | $9,000 | Instant write-off | Freelancer | $9,000 |
| Car (rideshare) | $40,000 | Depreciation (8 yrs) | ABN Holder | ~$4,000+ |
| Laptop (employee) | $1,200 | Depreciation (3 yrs) | PAYG Employee | ~$320 |
| Drill (employee) | $250 | Immediate (≤$300) | PAYG Employee | $250 |
Top 5 Mistakes with Big Gear Claims
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Employees claiming instant write-off – not available.
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Not apportioning personal use – ATO hates it.
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Buying after 30 June – deduction delayed a year.
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No receipts or schedules – audit red flag.
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Splitting assets – can’t chop a $25k camera into “parts” under $20k.
Gotax Story – The EOFY Freelancer
Amy, a freelance videographer, held off buying a $15,000 drone until EOFY. Smart move — instant write-off got her a $4,500 refund boost right away. Her mate Jake waited until July. Same drone, but no deduction until the following year. Ouch.
Tools to Make It Easy
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Deduction Grabber – snap receipts.
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eCashBooks (www.ecashbooks.com.au) – depreciation schedules made simple.
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GoTax Online – prompts employees vs ABN holders so you don’t stuff it up.
FAQs – Capital Equipment
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Can employees use instant asset write-off? No. Only ABN holders.
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What’s the 2025 instant write-off threshold? $20,000.
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What’s the $300 rule for employees? Claim items ≤$300 instantly.
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Do I need to use the asset by 30 June? Yes, to claim it this year.
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Are second-hand assets eligible? Yes, if for business.
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Can I depreciate software? Yes, if over the cap.
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Do I need a logbook for vehicles? Yes, for business %.
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Can ABN holders pool assets? Yes, under small business rules.
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Can employees claim phones or laptops? Yes, depreciation rules apply.
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What about financing? Claim based on cost, not repayments.
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Do I need receipts? Always.
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What if I split personal and business use? Claim only the business %.
Related Reading
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Essential records: https://www.gotax.com.au/blog/essential-tax-records-what-to-keep
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Car expense claims: https://www.gotax.com.au/blog/claim-car-expenses-2025
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Small forgotten items: https://www.gotax.com.au/blog/small-forgotten-tax-deductions-2025
Browse more in the GoTax Online Library: https://www.gotax.com.au/blog
Gotax Checklist
- ABN holders: write-off < $20k, depreciate > $20k
- Employees: ≤$300 claim instantly, >$300 depreciate
- Plan purchases before 30 June
- Always apportion personal vs business
- Keep receipts & schedules
What Next
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