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Instant Asset Write-Off Explained for 2024–25: $20k Limit

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Find out how the $20,000 instant asset write-off works for small businesses in 2024–25. Who qualifies, what's eligible, and how to claim it with ease.

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Instant Asset Write-Off for 2024–25: What You Can Claim

Instant Asset Write-Off for 2025: What You Can Claim

Published: [Today's Date]

The $20,000 instant asset write-off is back, and it's a golden opportunity for small businesses to lower their tax bill fast — if you know how to play it right.

Here’s the breakdown, GoTax-style.

How the $20,000 Threshold Works

For the 2024–25 financial year, small businesses can immediately write off assets that cost $20,000 or less (excluding GST if you're registered for GST).

This is per asset, not total spend. Buy three eligible assets for $19,000 each? You can write off all three.

To qualify:

• Your business must have a turnover under $10 million – This refers to your gross income (before expenses) for the year. If you’re under this threshold, you’re considered a small business and eligible for the instant write-off.

• The asset must be used or installed ready for use in the same year – You can’t just buy it and leave it in the box. It needs to be operational by 30 June to claim it this year.

• It applies to new and second-hand assets – Yep, second-hand bargains are included as long as they meet the criteria above.

What Doesn’t Qualify

Some things don’t make the cut:

• Assets over $20,000 – If your asset costs more than $20,000 (ex GST), it’s not eligible for the instant write-off. Instead, it goes into the small business depreciation pool.

• Specific exclusions like horticultural plants and leased assets – Certain asset types are carved out of the instant write-off rules, so check with a tax pro if unsure.

• Businesses with turnover over $10 million – Larger businesses have different depreciation rules and aren’t eligible for this write-off.

Buying an Asset Over $20,000?

Sorry, no instant claim. But you can still get your deduction via the small business depreciation pool.

Here’s how that works:

• 15% deduction in the first year – No matter when during the financial year you bought the asset, you can claim 15% of the cost as a deduction.

• Then 30% each following year – You keep deducting 30% of the remaining pool balance each year until it’s gone.

Key Rules and Traps to Watch

• The $20,000 limit is per asset – If you buy two $19,000 machines, both can be written off. But a $38,000 machine? No dice.

• You must have the asset ready for use this financial year – Ordering it isn’t enough. It has to be installed or in operation by 30 June.

• The car limit still applies: $68,108 for 2024–25 – For vehicles, you can only claim depreciation up to this amount, even if the vehicle cost more.

• Budget changes happen – The rules can change each year, especially after the Federal Budget. Stay current to avoid surprises.

Quickfire Checklist

• Is your business turnover under $10 million? – Check your total annual income. If you're under, you're eligible.

• Asset cost $20,000 or less (ex GST)? → Claim the instant deduction – Ensure you exclude GST when checking the price.

• Over $20,000? → Use the depreciation pool – Higher-cost assets still get claimed, just not instantly.

• Asset ready for use this year? – Operational by 30 June? You’re good to go.

• Got your invoice or proof of use? – Don’t rely on memory. Keep documentation for every purchase.

Pro Tip from the GoTax Crew

The ATO loves a good paper trail. Keep all receipts, invoices, and proof of use. It makes your claim stronger and audit-proof.

Final Word: Claim Smart

This is a powerful way to reduce your taxable income — especially for sole traders, contractors, and small business owners who need new tools, gear, or vehicles.

Gotax makes it simple to claim:

• Full Asset Deductions calculated automatically

• Easy online tax return with business tools included

Get started now: https://www.gotax.com.au/start-now