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  • Simplified depreciation rules



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If you are an eligible small business you may choose to calculate deductions for your depreciating assets using these rules. In general, the taxable purpose proportions of the adjustable values and second element of cost amounts of most:

    • depreciating assets costing less than $1,000 each can be written off immediately
    • other depreciating assets with an effective life of less than 25 years are pooled in a general small business pool and deducted at the rate of 30%
    • depreciating assets with an effective life of 25 years or more are pooled in a long-life small business pool and deducted at the rate of 5%
    • newly acquired assets are deducted at either 15% or 2.5% (half the relevant pool rate) in the first year, regardless of when they were acquired during the year.

    The taxable purpose proportion is your reasonable estimate of the proportion you will use, or have installed ready for use, a particular depreciating asset for a taxable purpose.

    Simplified depreciation

    If a small business entity chooses to stop using the simplified depreciation concession, it cannot again choose to use that concession until at least five years after the income year in which it chose to stop using that concession.

    Last modified: 14 Jul 2020QC 27915