Depreciation Calculator
Work out how much an asset depreciates each year using the straight-line method.
Depreciation Calculator
Enter your asset details to calculate annual depreciation.
Depreciation Breakdown
What This Depreciation Calculator Does
This tool calculates how an asset's book value decreases year by year over its estimated useful life, supporting both the straight-line method, which spreads depreciation evenly, and the declining balance method, which front-loads larger depreciation amounts in earlier years, reflecting how many assets actually lose value faster when newer.
How to Use the Depreciation Calculator
Enter the asset's original purchase cost. Enter its estimated useful life in years. Enter its expected salvage value at the end of that useful life. Select your depreciation method. A full year-by-year depreciation schedule appears instantly once calculated.
Straight-Line Versus Declining Balance Depreciation
The straight-line method subtracts an identical depreciation amount each year, calculated as the asset's depreciable value divided evenly by its useful life. The declining balance method instead applies a fixed percentage to the asset's remaining book value each year, resulting in larger depreciation amounts early on that gradually shrink over time, often better reflecting how vehicles and certain equipment actually lose value.
Pro Tip: New vehicles commonly follow a pattern closer to declining balance depreciation, losing a larger percentage of value in early years before the rate of decline gradually slows over time.
Annual Depreciation = (Cost − Salvage Value) ÷ Useful Life
Depreciation Rate (%) = (Annual Depreciation ÷ Cost) × 100
Straight-line method — equal depreciation each year.
Why Depreciation Matters for Both Businesses and Individuals
Businesses use depreciation schedules for accounting and tax purposes, spreading an asset's cost across its useful life rather than expensing the full purchase price immediately. Individuals commonly use depreciation logic informally to estimate a vehicle's resale value over time, since cars typically lose a substantial portion of their value within the first few years of ownership.
Frequently Asked Questions
Straight-line depreciation subtracts an equal amount each year, while declining balance depreciation applies a fixed percentage to the remaining value, resulting in larger depreciation amounts in earlier years.
Subtract the salvage value from the original cost, then divide that depreciable amount by the asset's useful life in years to get the equal annual depreciation figure.
New vehicles commonly follow a pattern closer to declining balance depreciation, losing a larger percentage of value in early years before the rate of decline gradually slows over time.
Salvage value is what the asset is expected to be worth at the end of its useful life — for example, resale or scrap value. If you expect it to be worthless, enter zero.