Depreciation Rate for Laptops in Australia (2026 ATO Guide)

What Is the Depreciation Rate for Laptops in Australia?

According to the Australian Taxation Office (ATO), laptops and portable computers have an effective life of 4 years. This gives you two depreciation rate options:

Method	Rate	How It Works
Diminishing Value	50%	Higher deductions in earlier years
Prime Cost	25%	Equal deductions each year

Diminishing value rate = 200% ÷ effective life (200% ÷ 4 = 50%). Prime cost rate = 100% ÷ effective life (100% ÷ 4 = 25%).

Worked Example: $2,000 Laptop

Buy a $2,000 laptop on 1 July 2025 (start of the financial year) for a full-year deduction:

Diminishing Value Method (50%)

Financial Year	Opening Value	Deduction	Closing Value
2025–26	$2,000	$1,000	$1,000
2026–27	$1,000	$500	$500
2027–28	$500	$250	$250
2028–29	$250	$250	$0

Prime Cost Method (25%)

Financial Year	Opening Value	Deduction	Closing Value
2025–26	$2,000	$500	$1,500
2026–27	$1,500	$500	$1,000
2027–28	$1,000	$500	$500
2028–29	$500	$500	$0

Which method is better? Diminishing value gives you $1,000 in Year 1 vs $500 with prime cost. Most small businesses prefer diminishing value for the bigger upfront deduction.

First-Year Pro-Rata Rule

If you buy the laptop 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 $2,000 laptop on 1 January 2026 (181 days remaining in the FY).

• Diminishing value: $2,000 × 50% × (181/365) = $496
• Prime cost: $2,000 × 25% × (181/365) = $248

Instant Asset Write-Off

If your laptop 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 4 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 a "Laptop" for ATO Purposes?

The ATO’s 4-year effective life applies to:

• Laptops and notebook computers
• Portable computers
• 2-in-1 detachable devices (e.g. Microsoft Surface Pro)
• Chromebooks used for business

Desktop computers also have a 4-year effective life. Tablets have a shorter effective life of 3 years.

How to Claim Laptop Depreciation

1. Must be used for business purposes. Only claim the business-use percentage. If you use the laptop 70% for work, claim 70% of the depreciation.
2. Choose your method — diminishing value or prime cost. You must stick with the same method for the life of that asset.
3. Keep records — purchase receipt, proof of business use percentage, and your depreciation schedule.
4. Report in your tax return — include the deduction amount in your business expenses or work-related deductions.

Calculate Your Laptop Depreciation

Use our free depreciation calculator to get an instant depreciation schedule for your laptop — just select “Laptop / Computer” and enter the purchase price and date.

Frequently Asked Questions

What is the ATO effective life for a laptop?

The ATO sets the effective life at 4 years for laptops, notebooks, and portable computers.

Should I use diminishing value or prime cost for my laptop?

Most small businesses use diminishing value because it gives a bigger deduction in the first year ($1,000 vs $500 on a $2,000 laptop).

Can I claim 100% of my laptop as a tax deduction?

If it 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 the laptop personally, only claim the business-use percentage.

Do I need to keep a logbook for my laptop?

No formal logbook is required, but you should keep your purchase receipt and a reasonable estimate of business vs personal usage that you can justify if audited.

What if I sell or dispose of my laptop before it’s fully depreciated?

You’ll need to do a balancing adjustment. If you sell it for more than the book value, the difference is assessable income. If you sell for less, you can claim the remaining amount as a deduction.