What is the instant asset write-off for small businesses in the 2024-25 financial year?

During the 2024-25 year, eligible small businesses (aggregated turnover under $50 m) may immediately deduct the full cost of eligible assets costing less than the relevant threshold (for example $20,000 or more — check current ATO rules) if the asset is first used or installed ready for use by 30 June 2025. This accelerates the deduction instead of claiming depreciation over multiple years.

Which assets qualify and what conditions must I meet to use the instant asset write-off?}

Qualifying assets include new or second-hand items (if the business meets the eligibility), used solely for your business, and ready for use by year-end. The asset must be first used or installed ready for use within the 2024-25 income year. Business use must be more than 50 % for the deduction. Assets not eligible include horticultural plants, certain infrastructure and buildings. It’s essential to apply the write-off before other depreciation methods.

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Maximise Your Tax Benefits: $20,000 Instant Asset Write-Off for Small Businesses in 2024–25

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What Is the Instant Asset Write-Off?

The $20,000 instant asset write-off for the 2024-25 financial year gives small business owners a valuable opportunity to reduce their tax bill and reinvest in growth. Under this provision, eligible businesses can claim an immediate deduction for the business portion of depreciating assets that cost less than $20,000 each.

At Trinity Accounting Practice, we help small business owners take full advantage of this concession while ensuring compliance and accurate reporting.

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Eligibility Criteria

To qualify for the instant asset write-off, your business must meet the following conditions:

The asset must be first used or installed ready for use between 1 July 2024 and 30 June 2025
Your business must have an aggregated annual turnover of less than $10 million
Each individual asset must cost less than $20,000 (excluding GST if you are registered for GST)
You must be using the simplified depreciation rules for small business

There is no limit on the number of assets you can claim, provided each one individually costs less than the $20,000 threshold. Both new and second-hand assets are eligible.

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Key Benefits for Small Business

Immediate Tax Savings

Rather than depreciating an asset over several years, you can claim the full deduction in the year the asset is first used. This directly reduces your taxable income for 2024-25, meaning a lower tax bill when you lodge your return.

Improved Cash Flow

By bringing forward the full deduction into a single year, you lower your tax payable sooner. This frees up cash that can be reinvested in your business, whether that is hiring staff, purchasing stock, or funding marketing.

Simplified Record Keeping

Assets claimed under the instant write-off do not need to be tracked on a long-term depreciation schedule. This simplifies your bookkeeping and reduces the administrative burden at tax time.

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What Assets Can You Claim?

The instant asset write-off applies to a broad range of depreciating assets used for business purposes. Common examples include:

Office furniture, desks, and chairs
Computers, laptops, monitors, and printers
Tools, power equipment, and trade machinery
Point-of-sale systems and IT infrastructure
Commercial vehicles (subject to the car depreciation cost limit of $69,674 for passenger vehicles)
Software licences and subscriptions
Kitchen and catering equipment for hospitality businesses
Medical and diagnostic equipment for healthcare practices

If an asset is used partly for personal purposes, you can only claim the business-use portion. For example, if you purchase a laptop for $1,800 and use it 70% for business, the deductible amount is $1,260.

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What Happens to Assets Costing $20,000 or More?

Assets that cost $20,000 or more cannot be instantly written off under this concession. Instead, they are allocated to the small business general depreciation pool and depreciated at the following rates:

First year: 15% of the asset cost
Each subsequent year: 30% of the remaining pool balance

It is important to keep full documentation for these assets, including purchase invoices, evidence of business use, and records of when the asset was first used or installed.

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Important Things to Remember

Timing is critical: The asset must be delivered, installed, and ready for use before 30 June 2025. Simply ordering or paying for an asset is not sufficient if it has not been set up for use by that date.
GST-registered businesses: The $20,000 threshold is measured excluding GST. If you are not registered for GST, the threshold applies to the GST-inclusive price.
Simplified depreciation rules: You must be using the simplified depreciation rules to access this concession. If you have previously opted out, you may need to re-elect into the simplified system.
Motor vehicles: Passenger vehicles are subject to the car depreciation cost limit of $69,674 for the 2024-25 year, regardless of their purchase price. However, commercial vehicles such as utes and vans with a payload capacity exceeding one tonne are exempt from this cap.

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How Trinity Accounting Practice Can Help

Our experienced team helps you make the most of the instant asset write-off while staying compliant. Whether you are planning a single purchase or investing in multiple assets before 30 June, we provide practical guidance tailored to your situation.

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What We Provide

Eligibility checks specific to your business size, structure, and turnover
Strategic asset planning to ensure purchases are timed and documented correctly
Proper setup and recording in Xero (we are certified Xero advisors)
End-to-end support for accurate tax reporting and lodgement

We specialise in supporting small business owners across a range of industries, including construction and trades, childcare, hospitality, and healthcare. Visit our industries page to see how we support businesses in your sector.

If you are considering asset purchases before the end of the financial year and want to understand how the write-off applies to your business, book a consultation with our business advisory team today.

For businesses that need ongoing strategic financial oversight, our Virtual CFO division, VCFO Australia, provides budgeting, forecasting, and compliance support that helps you plan capital expenditure as part of a broader financial strategy.

Trinity Accounting Practice

Accounting Firm in Beverly Hills, Sydney

Phone: 02 9543 6804

Address: 159 Stoney Creek Road, Beverly Hills NSW 2209

Website: www.trinitygroup.com.au

Weekend and after-hours appointments available

Book online now

Our Virtual CFO division, VCFO Australia, provides strategic financial management, budgeting, forecasting, and compliance support for growing businesses and not-for-profits.

Learn more about what we offer

Discover the industries we specialise in

Our mortgage brokerage division, Nexus Wealth Partners Pty Ltd, assists clients with home loans, refinancing, and business finance.

Disclaimer: Information provided on this website is intended as a general overview only and does not replace professional advice tailored to your personal circumstances.

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