To get started, you need to quantify the total cost of the asset and then know how much of the total cost of each asset you can write off over time. This will depend on the asset’s value and longevity. This type of tax deduction is called ‘depreciation’. It’s a way for businesses to reduce tax obligations on assets that lose value over time due to wear-and-tear or obsolescence. 

Types of assets you can claim

There are many types of assets you can write off. Each should have characteristics in common that they are expected to decline in value and only have an expected useful life span. Eligible assets can include:

  • hand tools, power tools and safety equipment
  • computer hardware and software
  • office furniture such as chairs, desks and filing cabinets
  • other plant and machinery used by the business.

The cost of an item includes the initial purchase price, plus any additional costs involved in transporting it and setting it up for business use. Eligible assets can be purchased new or second-hand.