Equipment over $20,000 and the tax deduction: buy in June, or when the business needs it?

Your next machine costs $50,000, or $80,000, or $120,000. Your accountant mentions 30 June. You wonder whether you need to rush.

Short answer: probably not for tax reasons. The big, quotable deduction belongs to assets under $20,000. Above that line, the deadline loses most of its grip, and the purchase date should follow the business, not the tax calendar.

Does the instant write-off apply to equipment over $20,000?

No. From 1 July 2026 the $20,000 threshold is permanent for small businesses with aggregated turnover under $10 million, and it applies per asset. Under the ATO’s rules, an asset that costs $20,000 or more generally goes into the small business simplified depreciation pool.

Asset cost	Treatment	Deduction in the first year
Under $20,000	Instant asset write-off	The full cost
$20,000 or more	Small business pool	15% of the cost

For a GST-registered business, the cost is tested excluding GST. So a machine at $21,000 including GST may still sit under the line. Check the ex-GST figure on the tax invoice before you assume anything.

How does the small business pool work?

The pool is one running balance. Every asset that goes in is depreciated together:

• Year one: 15% of the cost of the asset.
• Every year after: 30% of the pool balance.
• Small balance: the ATO says a pool balance under the write-off threshold at year end can be deducted in full.

Two details matter for timing. First, the first-year rate is a flat 15% however early or late in the year the asset is first used or installed ready for use. There’s no half-year or part-year calculation to win by buying on 1 July. Second, you keep deducting the pool each year, so the deduction is spread, not lost.

What is 30 June actually worth for a large purchase?

It’s worth one year of deferral on 15% of the cost. Here is an illustrative example. The figures are invented, and a company paying tax at 25% is assumed for simplicity.

Illustrative: a $60,000 machine (excluding GST)

Year	Deduction	Tax reduced by (at 25%)
Year 1	15% × $60,000 = $9,000	$2,250
Year 2	30% × $51,000 = $15,300	$3,825
Two-year total	$24,300	$6,075

Buy it on 28 June or 3 July and the pattern is identical. Only the starting year moves. The June buyer sees the $2,250 tax reduction a year sooner, and the July buyer gets it a year later. Nobody loses the deduction.

So the question for a $60,000 machine isn’t “June or lose it”. It’s “is a one-year delay on about $2,250 of tax more valuable than whatever the machine earns, or costs me, in the meantime?”

What does waiting for July really cost?

Waiting costs the machine’s work. Suppose the machine would add $3,500 a month of extra profit once running, from jobs you can’t currently take. Waiting from June to the following January to buy “at a better time” costs about seven months of that profit, which is $24,500. That’s more than ten times the $2,250 you were protecting.

The reverse also happens. If the work isn’t there yet, buying early to catch a deduction means repayments with no extra income, and a deduction only returns a slice of what you spend. Our guide on buying just to save tax walks through why a deduction is never a discount.

Put your own numbers in the cost of waiting calculator. If lost profit and making-do costs outweigh the one-year tax deferral, the date is set by the business. If you’d like a second pair of eyes on whether the purchase stacks up, you can see if you qualify in about a minute, with no credit check at the enquiry stage.

When should you still care about 30 June?

There are cases where June genuinely matters:

1. An unusually profitable year. If this year’s profit is much higher than the next one will be, a deduction now can be worth more than one next year. This is a conversation with your accountant, with your actual numbers.
2. Assets just under the line. An item at $19,500 gets the full cost in one go. An item at $20,500 gets 15%. If you can buy the smaller, cheaper configuration for a good business reason, the tax treatment changes a lot. If the cheaper item doesn’t do the job, don’t buy it for the deduction.
3. A bundle that could be staged. If you’re buying several separate assets, such as a trailer, a compressor and a set of workshop tools, each is tested on its own. Separate assets each under $20,000 can each be written off. Genuinely single assets, like a machine and its attachments sold as one, can’t be dressed up as several.
4. A cash-flow pinch in July. If a large tax bill is due and the deduction would soften it, factor that in.

For the broader June-versus-July choice, see buying in June or July.

Does the installed-ready-for-use test still apply?

Yes, and it’s where large purchases trip up. The deduction belongs to the income year in which the asset is first used or installed ready for use. Large equipment often has a long gap between paying a deposit and commissioning it.

A machine ordered in May, delivered in June and commissioned in August is a next-income-year asset, even if the invoice is dated June. A “just in time for EOFY” purchase that isn’t running by 30 June has bought you nothing on the tax side. Get the commissioning date from the supplier in writing. More detail is in our guide to installed ready for use by 30 June.

Why do so many sources get this wrong?

Most of what you’ll read about EOFY equipment buying was written around the headline threshold, so it talks about assets that qualify for a full write-off and skips everything above it. Older articles also quote earlier thresholds that applied for a single year at a time, which is why the “buy before 30 June or lose it” warning stuck. With the threshold now permanent, that urgency has gone for assets under the line, and for assets over it the urgency was never there in the first place.

The practical lesson: when someone tells you to buy by 30 June, ask what the dollar benefit is for this specific asset, in this specific year, and compare it with what a delay costs you. If they can’t put a number on it, treat it as a prompt to talk to your accountant, not a deadline.

How does finance fit in?

Financing the machine doesn’t change the depreciation treatment: the deduction follows the asset, not the way you paid for it. What finance changes is cash. Spreading a $60,000 purchase over a term keeps the working capital free, which is often what lets you act when the business needs it rather than when the cash balance allows.

Loan repayments are separate from the asset’s deduction, and the total dollar cost of finance is the number to weigh against what waiting costs. For larger purchases, a property-secured loan can sometimes suit, and unsecured or cash-flow options are generally sized on turnover and bank statements. Which suits depends on your circumstances. We’re not a tax adviser, so talk to your accountant about how your purchase is treated.

When does waiting win?

Plenty of times. Wait if:

• The current machine still runs reliably and its repair costs are modest.
• The extra work is a hope rather than an order book.
• The supplier has a model changeover coming and a runout discount is likely.
• You can’t yet commission the machine properly, for example because the site isn’t ready.

None of those reasons is tax. Equally, “the tax year ends soon” is not a reason to buy equipment you can’t use yet. Look at the when waiting is smarter page for the full checklist.

A quick decision path

1. Get the ex-GST cost and the commissioning date from the supplier.
2. Work out first-year and second-year pool deductions and the tax effect with your accountant.
3. Price the cost of waiting in dollars: lost profit, extra repairs, lost jobs, price rises.
4. Compare it with the total dollar cost of finance.
5. Choose the date the numbers support. Treat 30 June as a tiebreaker only.

Ready to see where you stand?

If you’ve done the sums and the machine pays for itself sooner than the tax calendar suggests, it may be time to look at funding. We help Australian business owners work out whether now is the right moment and which kind of finance suits the purchase.

A short enquiry takes about a minute and doesn’t involve a credit check, so asking won’t touch your credit file. We don’t send your details out to a pile of lenders. A real person reads your answers, thinks about your situation and calls you. Please fill the form in accurately, so the first option we suggest is the right one.

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