Decline in value for work equipment

An employee can claim an immediate deduction when the item costs $300 or less, is used mainly (more than half) to earn salary and wages rather than business income, and is not part of a set — or one of several identical or substantially identical items — that you started to hold in the same year and that together cost more than $300. The claim is the GST-inclusive cost multiplied by the work-use percent. The private share is not deductible, and there is nothing left to decline in later years.

Anything else is a decline in value, spread over the effective life. The first year counts the days from the date you first used the item, or had it installed ready for use, through 30 June. Later years count each day you still hold it. A full income year is 365 days, or 366 when it includes 29 February. The formulas still divide by 365.

Prime cost: cost × (days held ÷ 365) × (100% ÷ effective life). Diminishing value: base value × (days held ÷ 365) × (200% ÷ effective life). The base value starts as the cost, then becomes what is left after each year’s full decline. The deductible amount is that decline multiplied by the work-use percent. The written-down value still falls by the whole decline, not just the work-use share.

Diminishing value front-loads the claim. The same rate hits a smaller balance each year, so the early amounts are larger and the later ones shrink. Prime cost takes an even slice of the original cost in each full year. A short life makes that obvious: at 2 years, diminishing value is 200% ÷ 2, which is 100% a year, so one full year can write a laptop off. The 200% rate is for items first used on or after 10 May 2006. An older item can fall under the previous 150% rate.

The schedule runs to the end of the effective life — the point where prime cost has written the cost off, with the last year capped so the balance does not go below zero. Diminishing value can leave a balance. You can keep claiming it in later years while you still hold the item and use it for work. This tool stops the table at the end of the effective life. It also assumes you keep holding the item and that the work-use percent stays the same.

Effective lives for the common items are the Commissioner’s figures in Table B of the Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025 (F2025L01097). That instrument replaced the Income Tax (Effective Life of Depreciating Assets) Determination 2015. Taxation Ruling TR 2022/1 explained how those lives were set. It has been withdrawn. You can replace the Commissioner’s life with your own.

Low-value pool: an asset costing less than $1,000 can be pooled instead of this item-by-item schedule. The pool has its own rates. This tool does not calculate it.

Cars are left out. Work travel uses the cents-per-kilometre method or a logbook, not this schedule.

GST: enter the GST-inclusive price. Employees cannot claim GST credits, so the decline uses the full amount you paid.

Instant asset write-off is a business measure. It does not apply to a PAYG employee claiming work-related gear against salary and wages.

This is an estimate, not tax advice, and not the ATO depreciation calculator. Everything runs in your browser. Your last set of numbers is remembered on this device and never leaves it.