Permanent $20,000 instant asset write-off

The $20,000 instant asset write-off became permanent from 1 July 2026 for eligible small businesses. Hairdressers should understand the per-asset test and cash-flow limits.

Abby's take

What this means for the industry — and for independents

Industry impact. Making the $20,000 instant asset write-off permanent gives eligible small businesses more predictable treatment for lower-cost equipment but does not remove the need for a sound commercial purchase.

For freelancers. A freelance hairdresser may be considering dryers, tools, furniture or technology while carrying workspace and product costs. The write-off can change tax timing, but the purchase still reduces cash.

My take. The practical order is business case first and tax treatment second. Confirm the equipment solves a real capacity, quality or efficiency problem, then have a registered tax professional confirm whether the purchase qualifies.

What I'd do next

Write down the business problem each proposed asset solves before allowing the tax deduction to become the reason for buying it.
Confirm turnover, asset cost, business-use percentage and first-use timing with current ATO or registered professional guidance.
Compare the cash purchase or finance cost with the business buffer because an immediate deduction does not reimburse the price.
Keep invoices, payment records and evidence of business use so the correct tax treatment can be applied.

Watch-out. Tax eligibility, depreciation, GST treatment and business-use apportionment depend on current law and circumstances. This is general information, not tax or financial advice.

What the permanent $20,000 rule does

Business.gov.au states that from 1 July 2026 the $20,000 instant asset write-off is permanent. Treasury's 21 August announcement says eligible small businesses with turnover under $10 million can immediately deduct eligible assets costing less than $20,000.

A deduction is not a cash refund

An immediate deduction can reduce taxable income when the rules are met; it does not reimburse the full purchase price. The business still needs to fund the asset.

Watch the per-asset threshold

The official guidance describes eligible assets costing less than $20,000 and says the threshold applies on a per-asset basis. Keep invoices and confirm business-use and GST treatment professionally.

Authoritative sources available by 18 September 2026

Australian Government business.gov.au, Changes for businesses from 1 July 2026: https://business.gov.au/news/changes-for-businesses-from-1-july-2026

Treasury Ministers, Instant Asset Write-Off made permanent, published 21 August 2026: https://ministers.treasury.gov.au/ministers/anne-aly-2025/media-releases/instant-asset-write-made-permanent-small-businesses-numbers

Australian Government business.gov.au, Instant Asset Write-Off: https://business.gov.au/grants-and-programs/instant-asset-writeoff

Check the cash effect before buying the asset

Run the service-volume numbers first, then have your accountant apply the tax rules to a purchase that already makes sense.

Use the income calculator

Disclaimer: General business information only. It is not tax, accounting, financing or financial advice. Eligibility depends on current law and individual circumstances.

Common questions

Is the $20,000 instant asset write-off permanent in 2026?

Government guidance available by 18 September 2026 says it is permanent from 1 July 2026 for eligible small businesses.

Can a hairdresser claim an asset costing exactly $20,000 immediately?

The published threshold is for eligible assets costing less than $20,000. Confirm the exact purchase professionally.

Does the instant asset write-off mean equipment is free?

No. It is a tax deduction, not reimbursement of the purchase price.

Next step at The Beauty Basement

Let the equipment solve a business problem first

The permanent write-off improves tax certainty, but the strongest purchase is still one the business needs and can afford.