Depreciation Calculator
Calculate asset depreciation using straight-line, declining balance, and sum-of-years methods. Perfect for accounting, tax purposes, and financial planning.
Depreciation Calculator
Depreciation Results
Enter asset details to calculate depreciation
Depreciation Calculator – How Asset Depreciation Works
Our free depreciation calculator helps you estimate how much of an asset's value is used up each year for accounting or planning. You enter the asset cost, salvage value (expected value at end of use), and useful life in years. You can choose straight-line (equal amount each year), declining balance (higher depreciation in early years), or sum-of-the-years' digits. The calculator shows annual depreciation, accumulated depreciation, and book value each year so you can see how the asset's value decreases over time.
Straight-line is the simplest: (Cost − Salvage) ÷ Useful Life. Declining balance applies a fixed rate to the remaining book value each year (e.g. double-declining). Sum-of-the-years' digits front-loads depreciation. For Australian tax, the ATO specifies methods and effective lives for different assets—this tool is for estimates and education; for tax returns use the ATO rules or an accountant. For business asset planning and profit margins, try our profit margin calculator or ROI calculator.
Depreciation methods
- • Straight-Line: (Cost - Salvage) ÷ Useful Life
- • Declining Balance: Cost × Rate × (1 - Rate)^(Year-1)
- • Sum-of-Years: (Cost - Salvage) × (Remaining Life ÷ Sum of Years)
Tax depreciation (e.g. ATO effective lives, instant asset write-off) may differ from book depreciation. Always consult a tax professional for compliance.
Frequently Asked Questions About Depreciation
What is straight-line depreciation?
Straight-line depreciation spreads the cost of an asset (minus salvage value) evenly over its useful life. Each year you deduct the same amount. It is simple and commonly used for financial reporting.
When should I use declining balance?
Declining balance gives larger deductions in early years and smaller ones later. It can match an asset that loses more value when it is new. Tax rules in Australia and elsewhere may allow or require specific methods—check ATO guidelines or a tax adviser.
Does this calculator match Australian tax depreciation?
This calculator uses standard accounting methods (straight-line, declining balance, sum-of-years). The ATO uses effective lives and sometimes different methods (e.g. prime cost or diminishing value). For tax, use the ATO calculator or professional advice.