The $20,000 instant asset write-off for clinics and care providers: now permanent

For several years, the instant asset write-off threshold was set one year at a time, often confirmed late in the financial year. Practice owners who wanted to replace equipment had to guess whether the rules would still be there by 30 June. That uncertainty is gone. The ATO now says the $20,000 threshold is permanent from 1 July 2026 for small businesses with aggregated turnover under $10 million.

For clinics, pharmacies, childcare centres and care providers, which replace a steady stream of mid-priced equipment, that’s useful. This guide explains how the write-off works, what it does and doesn’t do for your cash flow, and how to plan purchases sensibly. It’s general information; your accountant should confirm how it applies to you.

What exactly is the instant asset write-off?

It’s part of the ATO’s simplified depreciation rules for small businesses. Rather than claiming depreciation on an asset over several years, an eligible business can deduct the full cost of an eligible depreciating asset in the year it’s first used or installed ready for use, if the asset costs less than the threshold.

The key settings, according to the ATO:

Setting	Detail
Threshold	Assets costing less than $20,000
Basis	Per asset, so multiple assets can be written off
Eligible businesses	Aggregated annual turnover of less than $10 million
Timing	Deduction in the year the asset is first used or installed ready for use
Status	Permanent from 1 July 2026 (now law)
Previous period	The temporary extension covered 1 July 2025 to 30 June 2026

Assets that cost $20,000 or more generally go into the small business pool, which the ATO describes as a 15% deduction in the year an asset is first used or installed ready for use and 30% for each year after.

What equipment in a clinic might qualify?

Whether a specific item qualifies depends on its cost, whether it’s a depreciating asset and how it’s used. As examples of items that often fall under the threshold in health and care businesses:

• GP and specialist clinics: ECG machines, spirometers, examination couches, dermatoscopes, autoclaves, workstations
• Dental: intraoral sensors, curing lights, some scanners, sterilisation equipment, handpieces
• Allied health: treatment tables, reformers, shockwave units, gait analysis tools
• Vet clinics: monitoring equipment, dental units, some analysers
• Pharmacies: dispensary computers, fridges, consulting room fit-out items that are depreciating assets
• Childcare and aged care: kitchen appliances, furniture, IT, some outdoor play items
• All sectors: laptops, phones, printers and software that qualifies as a depreciating asset

Larger items (dental chairs, CBCT, ultrasound, digital X-ray, vehicles above the threshold) generally go into the pool instead.

Does the write-off help my cash flow?

This is where many owners get caught. The write-off changes when you get a tax deduction. It doesn’t change what you pay for the equipment.

Here’s the sequence:

1. You buy the equipment and pay for it, or finance it.
2. It’s installed and used.
3. At tax time, your taxable income is lower by the cost of the asset.
4. Your tax bill is lower, by the asset’s cost multiplied by your tax rate.

So a clinic spending money on equipment in May still has to find that money in May. The tax benefit shows up later, when the return is lodged and tax is paid. For a practice that’s already stretched, buying equipment “for the tax deduction” can leave it short of cash in June.

If you need equipment and don’t want to drain the account, check your finance options in about a minute. There’s no credit check to ask.

How do clinics plan purchases around the write-off?

A sensible approach:

1. Make a list of genuine needs. Items that are failing, outdated or would add a service. Not items bought just for the deduction.
2. Get quotes and delivery times. The asset must be first used or installed ready for use in the income year you claim. A June order that arrives in July falls into the next year.
3. Check each item’s cost against the threshold. The limit is per asset. Ask your accountant how it applies to items bought together or with installation.
4. Look at GST. The ATO’s GST-free sales page says you can still claim GST credits on purchases used to make GST-free sales. Many health services are GST-free, so a GST-registered practice can often claim the GST on equipment. Your accountant can confirm how it works for your mix of services.
5. Decide how to pay. Cash, an existing facility or finance. Finance can spread the cost while you still claim the deduction, if the asset otherwise qualifies.
6. Keep records of invoices, delivery and installation dates.

Illustrative example

Illustrative only; not tax advice. A three-room physiotherapy clinic needs two new treatment tables, a shockwave unit and three workstations. Each item costs less than $20,000. The clinic’s turnover is well under $10 million and it uses the simplified depreciation rules. With its accountant’s confirmation, it could claim each item in full in the year they’re installed. The clinic doesn’t want to use its cash reserve in the last quarter of the financial year, when BAS and super are also due. An unsecured facility sized on turnover spreads the cost, and the deduction still reduces its tax bill for the year.

Common mistakes to avoid

• Assuming the threshold is for the total purchase. It applies per asset.
• Missing the installation date. Paying for something in June doesn’t help if it isn’t installed ready for use until July.
• Buying unnecessary equipment. A deduction on money you didn’t need to spend is still money spent.
• Forgetting the rest of the cash picture. June often brings BAS, super and insurance renewals. Plan the whole month.
• Mixing up fit-out and equipment. Structural works are generally treated differently from depreciating assets. Get the split right.

Planning a bigger project?

If your purchase is part of a larger fit-out or a new practice, the fit-out and equipment calculator adds up building works, equipment and a cash buffer so you can see the whole funding need at once. For specific equipment types, see medical equipment finance and dental equipment finance.

Does finance change the deduction?

A common question is whether financing equipment affects the write-off. The deduction is based on the cost of the asset and when it’s first used or installed ready for use, not on whether you paid cash. That means a practice can often spread the cash cost with finance while still claiming the deduction in the year the asset starts work, if it otherwise qualifies. The structure of the finance can matter, though. Leasing arrangements, where the financier owns the asset, are treated differently from loans where you own it. Ask your accountant how your chosen structure interacts with the write-off before you sign.

A quick EOFY equipment checklist

• List items you genuinely need, with quotes and delivery dates.
• Confirm installation can happen before 30 June if you’re relying on this year’s deduction.
• Check each item’s cost against the $20,000 per-asset threshold.
• Plan how you’ll pay, and how June’s other bills fit around it.
• Keep invoices and installation records with your tax papers.

Better equipment without draining the account

A permanent threshold makes equipment planning simpler: you can replace items when they need replacing, not in a rush before a deadline that might not be extended. What it can’t do is conjure the money to buy them. That’s where the right finance helps. It lets you install the equipment now, keep your reserve for wages and rent, and still take the deduction at tax time where your accountant confirms it applies.

If that sounds like your situation, starting an enquiry takes about 60 seconds, and there’s no credit check when you first ask. We don’t circulate your details around a panel of lenders. A real person who understands clinical equipment and practice cash flow reads your enquiry and calls you. Please be accurate about the equipment cost, what it’s for and your state, so we can match you with the right structure on the first call.

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