Depreciation of Mobile Phone

The depreciation rate of a mobile phone based on the Commissioner’s effective life estimate of 3 years is

  • 66.67% on a diminishing value basis; or
  • 33.33% prime cost

The effective life of a mobile phone is published by the Commissioner in the Effective Life Tables, Table B.

Inclusion in Table B means that the effective life determination applies across all industries.

As is the case with depreciating assets more generally, deductions for costs associated with a mobile phone (including depreciation) are allowable to the extent that the phone was used in earning assessable income. Where there is a part business usage an apportionment of the tax claim would be required.

For tablets and laptops – see Depreciation of Computers

Other depreciation claim choices

Adopting the Commissioner’s effective life determination as the basis for a depreciation claim is one option. Further options, including the possibility of a full deduction for the cost, are detailed below.

Small businesses: see the $20,000 threshold for accelerated small business depreciation claims and ATO Depreciation.

Self assessment of effective life

Taxpayers have the option of self-determining the effective life of a depreciating asset. The assessment takes into account the specific use circumstances of the asset, resulting in a calculated depreciation rate which could therefore differ from that based on the Commissioner’s determined effective life.

See the notes on Self-Assessment of Effective Life here.

Cost $300 or less – non-business taxpayer

Non-business taxpayers can claim a full deduction (i.e. 100% in year of purchase) if the mobile phone costs no more than $300. Where the cost is more than $300 then a depreciation formula must be used to calculate the percentage tax deductible amount.

Small Business – Instant Asset Write-off

Low-cost assets of taxpayers obtain full write-off for assets costing less than $1,000 (see low value pools).

The small business instant asset write-off concession allows a full deduction for the cost of assets below a (different) threshold.

The small business concession threshold has been adjusted in recent years.

  • in the periods from 7.30 pm on 12 May 2015 the threshold is $20,000 (see extended cut-off dates)
  • in the period 1 July 2012 to 31 December 2013 the threshold was $6,500
  • for assets acquired at other times the threshold is $1,000.

Asset Pooling

Assets costing more than the low value pool write-off threshold ($1,000) can be pooled with a deduction rate of 18.75% in the first year of acquisition and 37.5% thereafter on a diminishing value basis.

Alternatively under the small business simplified depreciation rules which provide an instant asset write-off allowance (nominally $1,000 but increased to $20,000 – as detailed above) – assets in excess of the thresholds are pooled with a 15% deduction in the first year and 30% thereafter. Opening pool balances falling below the threshold are also deductible in full.

See small business depreciation

Phone provided by an employer

The value of a mobile phone provided by a employer falls for consideration under the FBT rules, and there is therefore no deduction for the employee.

However, certain work-related items, including mobile phones, which are primarily for use in the employee’s employment are exempt from FBT.

See further – FBT Exemptions checklist – Section 58X

See also

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This page was last modified 2017-11-08