Finance Lab
Asset write-off and depreciation cash benefit
See the tax benefit of writing an asset off immediately against depreciating it over its life.
Immediate write-off benefit = cost × tax rate, received in year one. Depreciation over the life is written down each year at the rate you entered, and each year's deduction is discounted back at your cost of capital.
Step 1 · Enter your figures
Every box starts with an example figure. Replace each one with your own — the result updates as you type. Nothing you type is sent anywhere or stored.
The amount you can claim, excluding any GST credit you recover.
The company or entity tax rate that applies to you. Enter it from the current published rate.
The rate that applies to this asset over its effective life.
How many years of depreciation to show.
Used to bring later deductions back to today's money.
Step 2 · Read the result
Tax saved by writing it off now
$7,500
Received in the year of purchase, if the asset qualifies for immediate write-off.
- Tax saved by depreciating, in today's money
- $5,139
- Benefit of writing it off now
- $2,361The value of getting the deduction earlier rather than over the years entered.
- Amount depreciated over the period
- $24,958
- Written-down value remaining
- $5,042
- Tax saved by depreciating, in today's money$5,139
- Benefit of writing it off now$2,361
- Amount depreciated over the period$24,958
- Written-down value remaining$5,042
What this answer rests on (9)
- Cost of the asset$30,000
You entered this
The amount you can claim, excluding any GST credit you recover.
- Your tax rate25.0%
You entered this
The company or entity tax rate that applies to you. Enter it from the current published rate.
- Diminishing value depreciation rate30.0%
You entered this
The rate that applies to this asset over its effective life.
- Years compared5.0 years
You entered this
How many years of depreciation to show.
- Your cost of capital9.0%
You entered this
Used to bring later deductions back to today's money.
- The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
The calculator applied this
- Whether the asset qualifies for an immediate write-off, and any threshold that applies, is not decided here — confirm eligibility for the current year.
The calculator applied this
- The diminishing value method is used at the rate you entered, with a full year claimed in the first year.
The calculator applied this
- The benefit assumes you have enough taxable income to use the deduction in the year it arises.
The calculator applied this
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Save to my workspaceWhat this means for you
What the tax deduction on an asset is worth to you, and what getting it sooner rather than later is worth.
How to read it
- The benefit shown is timing, not free money — the total deduction is the same either way.
- The higher your cost of capital, the more valuable an immediate deduction becomes.
- The written-down value is what remains to claim in later years.
Watch out for
- Assuming the asset qualifies for an immediate write-off. Eligibility and any threshold change between years.
- Buying something you do not need for a deduction. You spend a dollar to save part of one.
- Having no taxable income to use the deduction against in the year it arises.
Assumptions behind this result
- The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
- Whether the asset qualifies for an immediate write-off, and any threshold that applies, is not decided here — confirm eligibility for the current year.
- The diminishing value method is used at the rate you entered, with a full year claimed in the first year.
- The benefit assumes you have enough taxable income to use the deduction in the year it arises.
General information only. This calculator does not take your circumstances into account and is not financial, tax, legal or investment advice. Confirm every rate, threshold and figure with your own adviser before acting.
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Take this further
Members run this calculator on their own recorded figures, save the workings to their workspace, export them to Word or Excel, and read the lessons that teach the thinking behind the result.