Depreciation Rate for Coffee Grinders in Australia (2026 ATO Guide)
What Is the Depreciation Rate for a Coffee Grinder in Australia?
According to the Australian Taxation Office (ATO), coffee grinders have an effective life of 8 years. This gives you two depreciation rate options:
| Method | Rate | How It Works |
|---|---|---|
| Diminishing Value | 25.00% | Higher deductions in earlier years |
| Prime Cost | 12.50% | Equal deductions each year |
Diminishing value rate = 200% ÷ effective life (200% ÷ 8 = 25.00%). Prime cost rate = 100% ÷ effective life (100% ÷ 8 = 12.50%).
Worked Example: $3,000 Coffee Grinder
Purchase a coffee grinder for $3,000 on 1 July 2025 (start of the financial year) for a full-year deduction:
Diminishing Value Method (25.00%)
| Financial Year | Opening Value | Deduction | Closing Value |
|---|---|---|---|
| 2025–26 | $3,000 | $750 | $2,250 |
| 2026–27 | $2,250 | $562 | $1,688 |
| 2027–28 | $1,688 | $422 | $1,266 |
| 2028–29 | $1,266 | $316 | $950 |
| 2029–30 | $950 | $238 | $712 |
| 2030–31 | $712 | $178 | $534 |
| 2031–32 | $534 | $134 | $400 |
| 2032–33 | $400 | $100 | $300 |
| 2033–34 | $300 | $75 | $225 |
| 2034–35 | $225 | $56 | $169 |
Prime Cost Method (12.50%)
| Financial Year | Opening Value | Deduction | Closing Value |
|---|---|---|---|
| 2025–26 | $3,000 | $375 | $2,625 |
| 2026–27 | $2,625 | $375 | $2,250 |
| 2027–28 | $2,250 | $375 | $1,875 |
| 2028–29 | $1,875 | $375 | $1,500 |
| 2029–30 | $1,500 | $375 | $1,125 |
| 2030–31 | $1,125 | $375 | $750 |
| 2031–32 | $750 | $375 | $375 |
| 2032–33 | $375 | $375 | $0 |
Which method is better? Diminishing value gives you $750 in Year 1 vs $375 with prime cost. Most small businesses prefer diminishing value for the bigger upfront deduction.
First-Year Pro-Rata Rule
If you purchase the coffee grinder partway through the financial year, your first-year deduction is pro-rated based on the number of days you held the asset.
Example: Buy a coffee grinder for $3,000 on 1 January 2026 (181 days remaining in the FY).
- Diminishing value: $3,000 × 25.00% × (181/365) = $372
- Prime cost: $3,000 × 12.50% × (181/365) = $186
Instant Asset Write-Off
If your coffee grinder costs less than the instant asset write-off threshold ($20,000 for the 2024–25 income year), you may be able to deduct the entire cost immediately rather than depreciating over 8 years. This applies to small businesses with aggregated turnover under $10 million.
Always check the current ATO guidance as thresholds can change each financial year.
What Counts as “Coffee Grinders” for ATO Purposes?
The ATO’s 8-year effective life applies to:
- Commercial burr grinders
- On-demand espresso grinders
- Bulk coffee grinders for cafes
- Retail coffee grinders
Espresso machines have a longer effective life of 10 years.
How to Claim Depreciation
- Must be used for business purposes. Only claim the business-use percentage. If you use the coffee grinder 70% for work, claim 70% of the depreciation.
- Choose your method — diminishing value or prime cost. You must stick with the same method for the life of that asset.
- Keep records — purchase receipt, proof of business use percentage, and your depreciation schedule.
- Report in your tax return — include the deduction amount in your business expenses or work-related deductions.
Calculate Your Depreciation
Use our free depreciation calculator to get an instant depreciation schedule — just select “Coffee Grinder” and enter the purchase price and date.
Frequently Asked Questions
What is the ATO effective life for coffee grinders?
The ATO sets the effective life at 8 years for coffee grinders.
Should I use diminishing value or prime cost?
Most small businesses use diminishing value because it gives a bigger deduction in the first year ($750 vs $375 on a $3,000 coffee grinder).
Can I claim the full cost as an immediate deduction?
If the coffee grinder costs less than the instant asset write-off threshold and you are an eligible small business, yes — you can deduct the full cost in the year of purchase. If you also use it personally, only claim the business-use percentage.
What if I sell or dispose of the coffee grinder before it’s fully depreciated?
You’ll need to do a balancing adjustment. If you sell it for more than the written-down value, the difference is assessable income. If you sell for less, you can claim the remaining amount as a deduction.