Depreciation Calculator
Enter asset cost, salvage value, and useful life to compare straight-line, declining balance, and sum-of-years-digits depreciation with a full year-by-year schedule.
The original purchase price or construction cost of the asset, before tax.
Estimated resale or scrap value at the end of the asset’s useful life.
Number of years the asset is expected to be in service.
Straight-line spreads cost evenly. DDB accelerates early deductions. SYD is a middle ground.
💰 Depreciable Base
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— annual depreciation (straight-line)
Asset Cost
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Salvage Value
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Useful Life
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📋 Depreciation Schedule
| Year | Beginning Book Value | Depreciation | Ending Book Value | Cumulative |
|---|---|---|---|---|
| Total | — | — |
⚖ Method Comparison — Year-by-Year Depreciation
| Year | Straight-Line | DDB (200%) | SYD |
|---|
💡 What this means
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📚 Master depreciation & accounting
📚 See top-rated accounting books on Amazon →📝 How to use this depreciation calculator
- Enter asset cost — the original purchase price or construction cost of the asset.
- Enter salvage value — what you expect to sell or scrap the asset for at the end of its useful life. Enter 0 if there is no expected residual value.
- Enter useful life in years — the period over which the asset will be used. Common values: computers 3-5 years, vehicles 5-8 years, furniture 7-10 years, buildings 27.5-39 years.
- Choose a depreciation method — straight-line for even expense, double-declining balance for accelerated front-loaded deductions, or SYD for a middle ground. Use “Compare All Three” to see them side by side.
- Click Calculate — see the depreciable base, annual depreciation, and a full year-by-year schedule with beginning book value, depreciation expense, and ending book value.
📌 5 tips for choosing a depreciation method
- ✓ Match depreciation to the asset’s value curve. Vehicles and computers lose value fastest in year one — use accelerated methods. Buildings depreciate steadily — straight-line is the natural choice.
- ✓ Front-load tax deductions with accelerated methods. DDB and SYD record more depreciation early, lowering taxable income when the deduction is worth more in present-value terms. In the US, MACRS is the IRS-mandated accelerated system for tax returns.
- ✓ Keep salvage value realistic. Overestimating salvage reduces depreciable base and annual deductions. Underestimating it inflates early deductions but creates a taxable gain when the asset is sold above salvage.
- ✓ Use different methods for books vs. tax. Many companies use straight-line for financial reporting (cleaner income statements) and MACRS/accelerated for tax returns (lower tax bills). This is legal and common — it creates a deferred tax liability on the balance sheet.
- ✓ Review useful life annually. If an asset is obsolete sooner than expected, you can shorten remaining life and accelerate the remaining depreciation. If it lasts longer, extend the life to avoid an overstated loss on disposal.
Disclaimer: This calculator provides depreciation estimates for educational and planning purposes only. Actual depreciation for tax purposes must follow IRS (US), CRA (Canada), or your local tax authority rules — including MACRS, Section 179, bonus depreciation, and CCA class rates that this simplified tool does not model. Not tax or accounting advice — consult a CPA or tax professional for compliance and filing decisions.
Related Tools
Depreciation is one piece of the business finance picture. These five calculators cover the rest — from car depreciation and ROI to profit margins, overhead costs, and break-even analysis.
- Car Depreciation Calculator — vehicle-specific depreciation with make/model depreciation curves, showing how much your car loses in value year by year.
- ROI Calculator — measure the return on a capital investment, accounting for the depreciated cost of assets purchased for the business.
- Profit Margin Calculator — depreciation is a non-cash expense that lowers operating profit; see how it factors into your margin profile.
- Overhead Cost Calculator — depreciation on equipment and buildings is a fixed overhead cost; see how it contributes to your total cost base.
- Break-Even Calculator — depreciation is a fixed cost that raises the break-even point; calculate how many units you need to sell to cover it.