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Can I claim computers and software in my business?

Written by Peter Carter • Bookkeeping Manager
Published on 11 Feb 2019

The short answer is yes.
Computers, Laptops, Tablets and phones can all be claimed as a deduction within your business up to the portion that they are used in business.

For instance, if you use your computer 100% for business then it can be claimed 100% as a deduction within the business. If it is only used 80% of the time for business then only 80% can be claimed.

Depending on the price of the computer hardware you may be able to claim an immediate deduction for the device. This depends on several factors such as revenue of the business and the ATO allowable limits on immediate write off of assets.

The following table gives you an idea of the deductible rates allowed by the ATO

Type of tax payer

Immediate Write-off

Depreciation rate

Individual

<$300

Desktop 4yrs, Portable Device 2yrs

Small to Medium Business

<$20,000 till 30/6/19 then <$1,000

Desktop 4yrs, Portable Device 2yrs

Large business

<$100

Desktop 4yrs, Portable Device 2yrs

If you buy specialised software or develop in house software specifically for your business, then there is a separate set of rules for this and the software is general pooled and written off over 5 years.

In house software is software, or a right (licence), to perform specific tasks within your business that you either buy off the shelf or have developed for your business.

The depreciation rates shown in the above table would still apply to software and in house software except when the amounts are greater than the immediate write off rates. If the software is greater than the immediate write off amount then the 5 year write off rule applies.

Under the 5 year write off rule the following table applies

Year expenditure incurred

Rate

1st year

0%

2nd year – 4th year

30%

5th year

10%

Should you have any queries in relation to computer and software depreciation rates please contact our office and let us help you get it right at tax time.

Check out another recent blog in this category.

Peter is a Certified Practicing Accountant (CPA) and has completed an Advanced Diploma in Accounting and Bachelor of Commerce (Accounting and Finance Law). Peter has worked with Fitzpatrick Group since July 2002. Author • Peter Carter

Senior Accountant, Fitzpatrick Group

Post Categories: Small Business | Tax Essentials
Post Tags Business / claim / computers / software / Tax

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