Small Business Pool vs Instant Asset Write-Off
Updated 17 October 2026 · General information · 2 min read
General information only, not tax or financial advice. This site is not the ATO. Check ato.gov.au or ask a registered tax agent. Last checked against ATO and Parliament sources: 17 October 2026. Examples use made-up numbers. Dates and amounts marked uncertain should be re-checked.
Short answer: Under simplified depreciation, assets costing less than $20,000 can be written off immediately. Assets costing $20,000 or more that cannot be deducted immediately can go into the small business pool, at 15% in the first income year and 30% in later years (ATO, page updated 27 August 2026).
Side by side
| Instant asset write-off | Small business pool | |
|---|---|---|
| Asset cost | Less than $20,000 each | $20,000 or more (or other assets added to the pool) |
| Deduction | Business portion, in the year of first use | 15% in the first year; 30% in each later year, on the pool balance |
| Pool balance under $20,000 at year end | Not the instant write-off test | The ATO says that balance may be written off |
| Turnover test | Aggregated turnover under $10 million | Same simplified depreciation regime |
Made-up example
A $30,000 asset added to the pool, ignoring other pool assets: first-year deduction 15% × $30,000 = $4,500. The indicative second-year amount is 30% of the remaining $25,500, which is $7,650. Partial-year adjustments, business-use splits and a separate half-year convention were not verified. The helper uses 15% then 30% and does not pretend to know your opening pool balance.
If the whole pool balance at year end is under $20,000, the ATO says that balance may be deducted. A single asset of $20,000 would sit under that line after a 15% deduction, but only if nothing else is in the pool. The helper does not assume that write-off.
Re-entering the regime
The ATO says the rule that stops a small business re-entering simplified depreciation for 5 years after opting out is suspended until 30 June 2027. If you previously opted out, the ATO says you can re-enter until then. Whether that suits you is a question for a registered tax agent.
Questions
Can an asset go straight to the pool?
The ATO says assets at or above the limit are pooled when you use the simplified rules.
Is half-year depreciation applied as well?
A further half-year convention, on top of the 15% first-year rate, was not verified.
What we could not verify
- Pool mechanics for mixed-use assets and for disposals.
- What happens to the re-entry suspension after 30 June 2027.
Sources
- ATO, $20,000 Instant Asset Write-off (last updated 27 August 2026) — ato.gov.au (search excerpt, 17 October 2026)
- ATO, $20,000 instant asset write-off (IAWO) here to stay (last updated 4 September 2026) — ato.gov.au (search excerpt, 17 October 2026)
- ATO, Instant asset write-off for eligible businesses — ato.gov.au (search excerpt, 17 October 2026)