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If you’re running a business, chances are you’ve heard about the instant asset write-off — and probably wondered if it’s still worth using, how it works now, and whether you’re missing out.
The short answer? It can be a powerful tool for managing cash flow and reducing your tax bill — but only if you understand how and when to use it properly.
This article breaks it down in plain English so you can make informed decisions, not rushed ones at the end of financial year.
The instant asset write-off allows eligible Australian businesses to claim an immediate tax deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use.
Instead of depreciating the asset over several years, you claim the full amount upfront (subject to thresholds).
Think of it as bringing forward your tax deductions, which can improve short-term cash flow.
The rules around the instant asset write-off have changed multiple times over the past few years — which is where most of the confusion comes from.
As at the current settings (subject to legislation updates):
This follows changes from previous years, including 2023,2024 and 2025. These frequent updates are why it’s important not to rely on last year’s rules when making decisions.
At its core, it’s simple — but the detail matters.
You Purchase an Eligible Asset
This could include:
It’s not enough to order or pay for the asset — it must be ready for use in your business before the deadline.
If the asset cost is under the threshold, you can claim the full business-use portion as a deduction in your tax return.
If you use the asset partly for personal use, you can only claim the business portion.
Generally, the scheme applies to:
If you’re unsure whether you qualify, this is where a conversation matters, eligibility isn’t always as straightforward as it seems.
Most tangible depreciating assets used in your business can qualify, including:
What doesn’t qualify:
This is where strategy comes in.
By claiming deductions upfront, you may reduce your taxable income — meaning less tax payable in the short term.
It can support decisions to upgrade equipment, improve efficiency, or expand operations.
If you were already planning to invest in assets, timing the purchase correctly can make a real difference.
Up-to-date equipment and systems can improve productivity and customer experience.
The instant asset write-off sounds simple — but there are a few common traps.
It’s Not “Free Money” – You’re not getting a discount, you’re bringing forward a deduction. The cash still leaves your business.
Timing Is Everything – If the asset isn’t ready for use before 30 June, you miss the deduction for that year.
It Shouldn’t Drive Bad Decisions – Buying something just to “save tax” often doesn’t stack up financially.
Cash Flow Still Matters – Even if you reduce tax, you still need to fund the purchase upfront.
If you’re considering using the instant asset write-off in 2026 but want to make sure it actually makes sense for your business, a quick conversation can help.
A Free Business Advice Clarity Call with the team at 360 Financial Strategists gives you a chance to talk through your options, understand the impact, and decide what’s right for you — without pressure. Sometimes it’s just about having the right conversation to make the next move clearer.
It allows eligible businesses to immediately deduct the cost of eligible assets used in their business, rather than depreciating them over time.
Currently set at $20,000 per asset for eligible small businesses, but always check for updates as thresholds change.
Yes — the threshold applies per asset, not per year.
No — financed assets may still qualify, depending on structure and use.
You’ll need to depreciate the asset over time instead of claiming it upfront.
Working from home (WFH) is no longer a temporary shift—it’s a normal part of how many Australians work. With that shift, the way you claim home office expenses on your tax return has evolved. The home office rate, set by the Australian Taxation Office, is the method many people use to calculate deductions for the costs of working from home.
In simple terms, the home office rate is part of the fixed rate method, which allows you to claim a set amount per hour worked from home to cover running expenses. These expenses typically include electricity, internet, mobile or phone usage, and basic office consumables like stationery. It’s designed to simplify the process so you don’t need to calculate every individual cost separately.
However, the system hasn’t stayed the same. Prior to recent changes, many Australians used the well-known 80 cents per hour shortcut method, which bundled nearly all home office expenses into one simple rate with minimal record-keeping. While convenient, it didn’t always accurately reflect actual costs—especially for people working from home long-term.
From 2023 onwards, the ATO removed the shortcut method and refined the fixed rate method. This means:
These changes aim to strike a balance between simplicity and accuracy. While the process is still relatively straightforward, it does require a bit more diligence than in previous years.
For many households, this has meant rethinking how they track their work patterns and expenses. It’s no longer enough to estimate—documentation matters. That said, the fixed rate method remains a practical option for most employees and small business owners who work from home regularly.
Claiming a work-from-home tax deduction comes down to choosing the right method and maintaining the right records. The two main options are the fixed rate method and the actual cost method.
The fixed rate method is the most commonly used because it simplifies the process. You multiply the number of hours worked from home by the ATO’s set hourly rate. This rate is intended to cover common running expenses, which means you don’t need to calculate each one individually.
To make a valid claim under the fixed rate method, you’ll need:
It’s important to understand what the fixed rate method does and does not include.
| Includes | Doesn’t include |
Electricity and gas for heating, cooling, and lighting Internet and phone usage Stationery and small consumables | Office furniture (such as desks and chairs) Computers, monitors, and other equipment Repairs or depreciation of assets These items can often still be claimed, but they must be calculated separately using different tax rules |
The alternative is the actual cost method, which requires you to calculate the exact work-related portion of each expense. This method can potentially result in a larger deduction, but it is more complex and requires detailed records. For most people, the fixed rate method strikes a good balance between ease and accuracy.
While claiming WFH expenses can reduce your taxable income, it’s important to approach it carefully. The ATO has increased its focus on compliance in this area, and incorrect claims can lead to adjustments or penalties.
Here are some key considerations:
One of the most common misconceptions is that you can claim a standard amount without any documentation. Under current rules, this is not the case. Even when using the fixed rate method, you still need to show how many hours you worked and that you incurred the relevant expenses.
Another important factor is consistency. If your working from home arrangement changes throughout the year—such as hybrid work or varying hours—you’ll need to reflect that accurately in your records.
For business owners and self-employed individuals, the rules can be slightly different, particularly when it comes to occupancy expenses like rent or mortgage interest. These claims can have broader implications, including potential capital gains tax impacts, so it’s worth seeking professional advice before proceeding.
The removal of the 80 cents per hour shortcut method marked a significant change in how Australians approach WFH deductions. While it was easy to use, it often oversimplified real costs and didn’t encourage accurate record-keeping.
The updated fixed rate method introduces more accountability. Instead of relying on a blanket rate with minimal evidence, taxpayers now need to demonstrate both their work-from-home hours and the expenses they’re claiming.
This shift reflects a broader trend in tax administration—moving towards greater transparency and accuracy. While it may feel like more work initially, it also creates a fairer system where deductions more closely reflect actual costs. In 2024-2025 the ATO updated its policy and went to a 70 cent per work hour fixed rate.
Staying on top of your WFH claims doesn’t need to be complicated. A few simple habits can make the process much easier at tax time:
The key is consistency. Small, regular updates are far easier than trying to reconstruct an entire year’s worth of information at the last minute.
While WFH deductions can provide some tax relief, they are just one part of your overall financial picture. Understanding how they fit into your broader strategy—such as cash flow, tax planning, and wealth creation—can help you make more informed decisions.
For example, choosing between the fixed rate and actual cost methods isn’t just about convenience. It can affect your taxable income, your record-keeping obligations, and even your long-term financial planning.
This is where having a clear strategy matters, even if you are a smaller size business or a consultant. Rather than treating tax deductions as a once-a-year exercise, integrating them into your overall financial plan can lead to better outcomes over time.
If you’re unsure how to approach this, it may be worth speaking with a professional. The ASIC provides general guidance on financial decision-making, but personalised advice can help you apply these rules to your specific situation.
Not sure if you’re claiming your working from home expenses the right way?
A quick conversation can help you understand what applies to your situation and where you might be missing opportunities.
Book a Clarity Call with the team at 360 Financial Strategists and get a clearer picture of your tax position and overall financial strategy.
The fixed rate is set by the ATO and is applied per hour worked from home. It is designed to cover common running expenses such as electricity, internet, and phone usage. The exact rate does change over time, so it’s important to check the latest ATO guidance.
Yes, you can claim WFH expenses if you meet the eligibility criteria and have the appropriate records. The claim must relate directly to your work and not be reimbursed by your employer.
The shortcut method has been removed. Taxpayers now need to use either the fixed rate method or the actual cost method, both of which require more detailed record-keeping. The current fixed rate is now 70 cents in 2026 with record keeping required.
You generally cannot claim WFH expenses without records. Even under the fixed-rate method, you need to show your work-from-home hours and provide evidence of the relevant expenses.
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