The Australian Taxation Office (ATO) has recently released two draft legislative instruments that could affect the way you manage tax depreciation and payroll withholding. These proposed changes may benefit business owners and employers across multiple industries, but understanding them—and applying them correctly—is key.
If your business owns assets or pays allowances to employees, here’s what you need to know.
1. New Draft: Effective Life of Depreciating Assets – 2025 Update (LI 2025/D14)
Each year, the ATO reviews and updates the effective life of depreciating assets, which directly affects how businesses claim tax deductions through depreciation.
The 2025 draft determination updates the effective life of a range of assets across industries such as:
- Construction
- Manufacturing
- Hospitality
- Medical and healthcare
- Transportation and logistics
By applying the correct effective life, you can legally maximise your tax deductions or manage your asset write-offs more strategically.
Why this matters:
If you’re acquiring new business assets or planning capital investments, using the right effective life ensures your tax depreciation claims are accurate and ATO-compliant—and that you’re not missing out on savings.
2. New Draft: Withholding Variation for Certain Allowances – 2025 (LI 2025/D15)
The second update relates to employee allowances, such as travel, meals, or work-related expenses.
This new draft proposes that withholding tax may be reduced to nil for some specified allowances. In plain terms, this means that employers won’t need to deduct PAYG withholding tax from certain types of payments to employees.
Why this matters:
This could reduce admin for payroll teams and allow employees to receive more in their take-home pay, improving satisfaction and cash flow. However, applying the variation correctly requires attention to detail and compliance with the draft instrument’s conditions.
How Boa & Co. Can Support You
While these updates are still in draft form, they show the ATO’s direction for the new financial year. These changes may appear technical, but they can have a real impact on your business’s bottom line—and mistakes can be costly.
At Boa & Co. Chartered Accountants, we help businesses:
- Stay ahead of tax law changes and draft legislation
- Apply the correct depreciation rates for different industries and asset types
- Review payroll systems to ensure withholding obligations are met
- Avoid unnecessary tax risks and maximise legal deductions
Let’s Talk
If your business is planning to buy assets, restructure employee packages, or simply wants to stay on the right side of the ATO, now’s the time to speak with a professional.
📞 Call us at 1300 952 286,
📧 Email [email protected], or
🌐 Visit www.boanco.com.au
to arrange a consultation with one of our tax advisors.
We’re here to help you make confident decisions—today and for the future.