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Depreciation Calculator

Calculate the annual depreciation of any asset using Straight-Line, Double Declining Balance, or Sum-of-Years Digits methods with a full depreciation schedule.

Asset cost ($)

Salvage value ($)

Useful life (years)

⚠️ Please fill in all required fields with valid numbers.

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Everyday Uses

Car value planning

See what your vehicle will be worth in 3–5 years before buying new versus used.

Business tax deductions

Spread equipment costs across years correctly — straight-line or accelerated — for your books.

Upgrade timing

Track when laptops and machinery approach the end of their useful book life.

Method comparison

Compare straight-line and declining-balance side by side to see which suits your cash flow.

Insurance claims and actual cash value

A policy paying actual cash value settles at the depreciated figure rather than what a replacement costs. The gap between the two is exactly what a replacement-cost policy is buying you.

When book value reaches zero

An asset fully written down on paper very often still works perfectly. Useful life is an accounting convention, not a prediction of when the thing will fail.

Frequently Asked Questions

What is Straight-Line (SL) depreciation and when should I use it?

SL depreciation spreads the cost evenly over an asset's useful life: Annual depreciation = (Cost − Salvage Value) ÷ Useful life in years. For example, a $50,000 machine with $5,000 salvage value over 5 years depreciates $9,000/year. Use SL for assets with consistent utility over time — buildings, furniture, office equipment.

When should I use Double Declining Balance (DDB) depreciation?

DDB is an accelerated method: Year 1 depreciation = 2 × (Cost ÷ Useful life). It front-loads deductions, which is advantageous for tax purposes and appropriate for assets that lose value rapidly in early years — vehicles, computers, manufacturing equipment. DDB switches to straight-line when SL would give a larger deduction.

What is the Sum-of-Years Digits (SYD) method?

SYD is another accelerated method using a fraction: (Remaining life ÷ Sum of years digits) × (Cost − Salvage). For a 5-year asset, the sum of digits = 1+2+3+4+5 = 15. Year 1 fraction = 5/15 = 33.3%, Year 2 = 4/15 = 26.7%, etc. It depreciates faster than SL but slower than DDB.

What is salvage value and how do I estimate it?

Salvage value (residual value) is the estimated worth of an asset at the end of its useful life. Vehicles: check used car market values. Equipment: often 10–15% of cost. Buildings: rarely zero. If uncertain, use 0 for a conservative estimate. Only the depreciable amount (cost minus salvage) is depreciated over the asset's life.

What depreciation method should I use for tax purposes?

In the US, the IRS mandates MACRS (Modified Accelerated Cost Recovery System) for most business assets — which uses DDB or SL depending on asset class. In the UK, HMRC uses capital allowances (Annual Investment Allowance, Writing Down Allowance). Consult a tax advisor; this calculator models accounting depreciation, which may differ from tax depreciation.