Depreciation (decline in value)

Depreciation lets you deduct the cost of a business asset — a laptop, tools, a vehicle — a bit each year as it wears out, rather than all at once. You spread the deduction over the asset’s effective life, which matches the expense to the years the asset earns you income.

Smaller assets can often be written off immediately under the instant asset write-off, so it’s worth checking which path gives the better result.

Grounded in ATO guidance. General information, not tax advice.