Australia · 2026-27 · checked 18 October 2026
How much will the $20,000 instant asset write-off save you? Less than $20,000, because it is a deduction, not a refund. The saving is the deduction times your tax rate. For a family it also moves Family Tax Benefit, child care subsidy and child support.
Put in your business profit, what you are buying and who is in your household. You get the deduction, the tax saved, the GST back and what it does to your family's payments, with every step shown.
What you enter stays in your browser. These are estimates, not tax advice: your accountant and the ATO decide what you can claim.
Tax is only part of it: family payments and child support move too. See what my family keeps ↓
The write-off lets a small business deduct the business share of an item's cost, in full, in the year it starts using it. The item has to cost less than $20,000 (leaving out the GST if you claim it back), and the business has to turn over less than $10 million a year.
On $100,000 of profit, an $18,000 item saved $5,760 in tax. For a couple with two young children it also lifted Family Tax Benefit by $3,600 a year. Both figures are worked out below.
These are the ATO's rules for 2026-27, from its pages updated 27 and 28 August 2026.
A sole trader with $100,000 of profit buys a piece of equipment for $19,800, GST included, for use 100% in the business. The business is registered for GST, so the cost for the write-off is $18,000 ($19,800 less $1,800 of GST). That is under $20,000, so all of it is deducted this year. The business pays cash and starts using the equipment on 1 November 2026. We ran the calculator on 18 October 2026 and changed only the household.
| The household | Tax and Medicare levy saved | Family Tax Benefit | Child support | GST claimed back | Comes back in the first year |
|---|---|---|---|---|---|
| Single, no children | $5,760 | $0 | none | $1,800 | $7,560 |
| Couple, partner has no income, children aged 6 and 3 | $5,760 | +$3,600 | none | $1,800 | $11,160 |
| Single parent who pays child support | $5,760 | $0 | $3,112 less paid | $1,800 | $10,672 |
The single parent's two children are with them 14% of nights, and the other parent earns $60,000. The GST is not a saving. The business paid it in the price and gets it back with a later activity statement. We show it so the first year adds up. The tax saved is 32 cents for each dollar deducted at this profit: $18,000 × 32% = $5,760.
| Deducted from the profit: the business share of the cost without GST, written off in full because it is under $20,000 | $18,000 |
| Taxable income falls from $100,000 to $82,000 | |
| Income tax and Medicare levy, less by 32 cents for each dollar | $5,760 |
| Family Tax Benefit, up by 20 cents for each dollar, because the family's income for it falls from $100,000 to $82,000 | $3,600 |
| GST claimed back | $1,800 |
| Comes back in the first year ($5,760 + $3,600 + $1,800) | $11,160 |
The Family Tax Benefit line is 20 cents because this family's income sits in the range where Part A falls by 20 cents for each dollar of income. It is worked out as it is in our Family Tax Benefit calculator. The children were born on 10 March 2020 and 2 May 2023.
The limit is a cliff, not a slope. We ran the same couple with two children at three prices, GST included.
| Price | Without GST | Deducted this year | Tax saved | Family Tax Benefit | GST back | Comes back in the first year |
|---|---|---|---|---|---|---|
| $21,890 | $19,900 | $19,900, all of it | $6,368 | $3,980 | $1,990 | $12,338 |
| $22,000 | $20,000 | $3,000, 15% | $960 | $600 | $2,000 | $3,560 |
| $27,500 | $25,000 | $3,750, 15% | $1,200 | $750 | $2,500 | $4,450 |
An item costing $20,000 is not "less than $20,000", so the $22,000 item goes into the pool. That is $110 more on the price and $8,778 less back in the first year. The pooled part is not lost. The rest of it ($17,000 for the $22,000 item) is deducted in later years at 30% a year, or all at once when the pool is under $20,000 at the end of a year. Our calculator leaves those later deductions out of its totals, because they depend on every other item in your pool. So the gap is real in the first year, and smaller over time.
The same $19,800 item used 60% for the business. The whole $18,000 cost is still under the limit, so it qualifies. Only 60% is deducted.
| Deducted: 60% of $18,000 | $10,800 |
| Income tax and Medicare levy saved | $3,456 |
| Family Tax Benefit, couple with two children | $2,160 |
| GST claimed back: 60% of $1,800 | $1,080 |
| Comes back in the first year | $6,696 |
Family Tax Benefit, child care subsidy and child support are all worked out from your adjusted taxable income. It starts with your taxable income, and a deduction lowers that. Services Australia then adds back some things, such as reportable fringe benefits and reportable super contributions.
Neither is automatic. Payments follow the income you tell Services Australia about, and are balanced against your tax return after the year ends.
Each of our calculators answers one question. The Net Income Modeller works out tax, Family Tax Benefit, child care subsidy, child support, Rent Assistance and Parenting Payment together, so you can see what an extra day's work, a pay rise or a salary package leaves your family.
Less than $20,000, because it is a deduction, not a refund. The saving is the deduction times your tax rate, with the Medicare levy on top. On $100,000 of profit, an $18,000 deduction saved $5,760 in tax in our run on 18 October 2026. For a couple with two young children it also lifted Family Tax Benefit by $3,600 a year.
If your business is registered for GST and can claim the full credit, the cost is the price without GST, so an item bought for $21,890 counts as $19,900 and fits under the limit. If you aren't registered, the GST is part of the cost. The whole cost of the item has to be under the limit, even if you use it only partly for business.
Businesses with an aggregated turnover under $10 million that use the simplified depreciation rules. Aggregated turnover includes connected businesses and affiliates. The item has to be first used, or installed ready for use, in the income year you claim it. The ATO says the $20,000 limit is permanent from 1 July 2026.
It goes into the small business pool. The business share of its cost is deducted at 15% in the first year and 30% a year after that, and a pool balance under $20,000 at the end of an income year can be written off. In our run a $27,500 item, GST included, gave a first-year deduction of $3,750.
It can, if the cost is under $20,000. Cars also have a car limit, $69,883 for 2026-27, which caps the cost used for depreciation and caps the GST credit on a car at $6,353. The car limit applies to passenger vehicles that carry fewer than 9 people and a load under one tonne. A ute or van that carries a tonne or more is outside it.
Yes. They are worked out from adjusted taxable income, which starts with your taxable income, so a deduction lowers it. A lower income usually means more Family Tax Benefit and child care subsidy, and less child support paid. In our run the couple with two young children gained $3,600 of Family Tax Benefit, and the single parent who pays child support paid $3,112 less.
No. A novated lease is an arrangement between an employee, their employer and a lease provider, so it needs an employer. A sole trader buys through the business, in cash or with a loan such as a chattel mortgage.
ATO and Services Australia pages read on 18 October 2026, with the date each page says it was last updated.
For brokers: Put this calculator on your own website, in your colours, and show a client what a purchase leaves their family. See how brokers use these calculators →
General information about the instant asset write-off for 2026-27 as at 18 October 2026, not personal advice, tax advice or an assessment. Talk to your accountant, and confirm your own situation with the ATO and Services Australia.