Instant Asset Write-Off Calculator Australia
Work out your instant asset write-off (IAWO) deduction for the 2024-25 and 2025-26 financial years. Small businesses with aggregated turnover under $10 million can instantly deduct eligible assets costing less than $20,000 each. Assets at or above $20,000 go into the small business simplified depreciation pool.
Based on Subdivision 328-D and the 2025-26 federal budget extension of the $20,000 IAWO threshold.
IAWO at $20,000 applies for both 2024-25 and 2025-26.
Your business's aggregated turnover. Must be under $10 million.
Closing pool balance from last year. Leave $0 if you don't have a pool.
Add 2% Medicare levy if a sole trader above the MLS threshold.
Enter GST-exclusive cost if you're GST-registered. Assets under $20,000 deductible cost are instantly written off.
| Asset | Cost | Outcome | Deduction |
|---|---|---|---|
| Laptop | $3,000.00 | IAWO | $3,000.00 |
| Office chair | $600.00 | IAWO | $600.00 |
| Total current-year deduction | $3,600.00 | ||
Tax saving is indicative. Actual benefit depends on your total taxable income, Medicare levy, and whether your business is a company, trust, or sole trader.
IAWO vs Normal Depreciation — Side-by-Side Comparison
Eligible for IAWO but not sure whether to claim it? Use this comparison to see exactly how much more tax you save by writing the asset off now versus depreciating it under Division 40 (Diminishing Value or Prime Cost) or the SBE pool. NPV is calculated at your supplied discount rate so you can compare present-value tax savings rather than just totals.
GST-exclusive if GST-registered; otherwise GST-inclusive.
Portion used for income-earning activity. 100% for purely business assets.
From ATO effective life tables (TR 2024/1) or your own assessment.
SBE concessions (IAWO + pool) require turnover < $10,000,000.
Sole trader: marginal + Medicare. Company: base-rate (25%) or full (30%).
Your cost of capital or opportunity cost. Higher rate → IAWO wins by a larger NPV margin.
| Path | Total deduction | Tax saving (total) | NPV tax saving |
|---|---|---|---|
| IAWO (instant write-off) | $15,000.00 | $4,800.00 | $4,571.43 |
| SBE Pool (15% year 1, 30% DV) | $15,000.00 | $4,800.00 | $4,386.39 |
| Div 40 Diminishing Value | $14,748.06 | $4,719.38 | $4,218.16 |
| Div 40 Prime Cost | $15,000.00 | $4,800.00 | $4,156.30 |
| Year | IAWO (instant write-off) | SBE Pool (15% year 1, 30% DV) | Div 40 Diminishing Value | Div 40 Prime Cost |
|---|---|---|---|---|
| Year 1 | $15,000.00 | $2,250.00 | $6,000.00 | $3,000.00 |
| Year 2 | — | $12,750.00 | $3,600.00 | $3,000.00 |
| Year 3 | — | — | $2,160.00 | $3,000.00 |
| Year 4 | — | — | $1,296.00 | $3,000.00 |
| Year 5 | — | — | $777.60 | $3,000.00 |
| Year 6 | — | — | $466.56 | — |
| Year 7 | — | — | $279.94 | — |
| Year 8 | — | — | $167.96 | — |
Shows the annual deduction under each path. Multiply by your marginal rate for tax saving.
Estimates only. Entity type (sole trader, company, trust), actual marginal rate, and SBE election status affect real outcomes. Speak to a registered tax agent for personal advice.
What is the instant asset write-off?
The instant asset write-off is a concession under Australia's small business simplified depreciation rules (Subdivision 328-D of the ITAA 1997). It lets eligible businesses deduct the full cost of a depreciating asset in the year it is first used or installed ready for use — rather than depreciating the cost over many years.
For both 2024-25 and 2025-26, the threshold is $20,000 per asset. The per-asset nature of the rule means a small business can write off multiple sub-$20,000 purchases in the same year with no aggregate cap.
How this calculator works
Enter your aggregated turnover, opening small business pool balance (if any), and each asset you've acquired or plan to acquire this year. For each asset, we:
- Multiply cost by your business-use percentage to get the deductible cost (GST-exclusive if you're GST-registered).
- If deductible cost is under $20,000 and the asset was first used this year, apply the IAWO — full deduction now.
- If $20,000 or more, add the deductible cost to the small business pool. Year-1 additions depreciate at 15% DV; carried-forward pool balance depreciates at 30% DV.
- If the pool balance (including this year's additions) is under $20,000 before depreciation, write off the entire balance.
The tax-saving estimate multiplies your total deduction by the selected marginal rate. This is a rough guide — actual tax benefit depends on entity type (sole trader, company, trust), Medicare levy, and other income.
Who can claim the IAWO?
- Small business entities with aggregated turnover under $10 million (grouped with connected / affiliated entities).
- You must have elected to use small business simplified depreciation. Opting out means you use Division 40 rules and can't claim IAWO.
- The asset must be first used or installed ready for use in the income year you're claiming.
- Both new and second-hand assets are eligible — unlike some investment-property Div 40 rules, small business simplified depreciation accepts both.
Historical thresholds (for context)
IAWO thresholds change frequently. Here's a short history so you can match up past years — these aren't active in this calculator, which covers the current $20,000 regime only:
- Pre-2020: Threshold was $1,000 → $20,000 → $25,000 → $30,000 through several budget changes.
- 2020–2023: Temporary Full Expensing (no cap) applied to most eligible assets for businesses with turnover under $5 billion.
- 2023-24: $20,000 threshold for small businesses (after TFE ended).
- 2024-25 and 2025-26: $20,000 threshold extended.
Frequently asked questions
What is the 2025-26 instant asset write-off threshold?
Who is eligible for the instant asset write-off?
What happens to assets over $20,000?
Can I claim IAWO on a second-hand asset?
What if my pool balance is below $20,000?
Does GST affect the threshold?
Is the instant asset write-off per asset or total?
What about improvements to an existing pool asset?
Is IAWO always better than normal depreciation?
What's the difference between SBE pool, Div 40 DV, and Div 40 Prime Cost?
How does NPV affect the IAWO-vs-depreciation decision?
What discount rate should I use for NPV?
Tax Accuracy & Sources
Calculates the $20,000 instant asset write-off and small business simplified depreciation pool outcomes for 2024-25 and 2025-26. It does not model Division 40 depreciation for entities above the $10m turnover threshold, and the tax saving is a simple marginal-rate estimate (no Medicare levy, offsets, or entity-specific rules).