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Small Business Simplified Depreciation Rules | $20k Instant Tax Write-off

Small Business Simplified Depreciation Rules

Small businesses can elect to apply the simplified depreciation rules. To determine whether you are a small business, the following criteria needs to be met:

  • The aggregate turnover for the business needs to be less than $10 million from 1 July 2016 onwards

What does this mean?

The following rules apply under the small business simplified depreciation regime:

  • the asset was first used or installed ready for use in the 2016-2017 income year.
  • Immediately write off – that is, immediately deduct or claim the total cost of the depreciating asset purchased provided the asset purchased costs less than $20,000 (Ex-GST).
  • write-off the balance of your existing small business pool at the end of an income year if the balance – before applying any other depreciation deduction – is less than $20,000
  • The assets purchased can be new or second hand but must cost less than $20,000 to get this deduction.


In the Budget 2017, the government announced an extension of the $20,000 instant asset write-off threshold to 30 June 2018. This extension still needs to be passed in parliament – the threshold currently reduces to $1,000 from 1 July 2017.