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Depreciation Calculator

Calculate asset depreciation with straight-line, declining balance, or SYD methods. Free schedule calculator — no signup.

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Enter your asset cost, salvage value, and useful life to see the depreciation schedule.

How to Use This Depreciation Calculator

  1. Enter the asset cost — the original purchase price of your equipment, vehicle, or property.
  2. Enter the salvage value — what you expect the asset to be worth at the end of its useful life (enter 0 if it will be worthless).
  3. Enter the useful life in years — how long you plan to use the asset (1 to 40 years).
  4. Choose a depreciation method — Straight-Line, Double Declining Balance, or Sum-of-Years-Digits.
  5. View your results — see the first-year depreciation and a full year-by-year schedule showing depreciation expense, accumulated depreciation, and book value.

The calculator auto-calculates as you type. Switch between methods to compare how each one affects your annual expenses.

The Formula

Straight-Line Depreciation:

Annual Depreciation = (Cost - Salvage Value) / Useful Life

Double Declining Balance:

Depreciation Rate = 2 / Useful Life
Annual Depreciation = Book Value at Start of Year × Rate
(Stop when Book Value reaches Salvage Value)

Sum-of-Years-Digits (SYD):

SYD = Useful Life × (Useful Life + 1) / 2
Year N Depreciation = (Remaining Life / SYD) × (Cost - Salvage Value)

Example: You purchase equipment for $50,000 with a $5,000 salvage value and a 10-year useful life.

Using Straight-Line:

  • Annual Depreciation = ($50,000 - $5,000) / 10 = $4,500/year
  • After Year 1: Book Value = $45,500

Using Double Declining Balance (Year 1):

  • Rate = 2 / 10 = 20%
  • Year 1 Depreciation = $50,000 x 20% = $10,000
  • After Year 1: Book Value = $40,000

Typical Asset Useful Life Spans

Asset TypeIRS Recovery PeriodCommon Salvage %
Computers & peripherals5 years0–10%
Office furniture7 years10–20%
Vehicles (cars/trucks)5 years15–25%
Manufacturing equipment7–10 years5–15%
Restaurant equipment5–7 years10–20%
Residential rental property27.5 yearsVaries
Commercial buildings39 yearsVaries

Tip: The IRS has specific recovery periods for different asset classes. Always check Publication 946 or consult your accountant to use the correct useful life for tax purposes.

Frequently Asked Questions

What is depreciation?
Depreciation is the accounting method of allocating the cost of a tangible asset over its useful life. It reflects the wear and tear, aging, or obsolescence of the asset. For example, a $50,000 delivery truck with a 10-year useful life loses value each year, and depreciation captures that decline on your books.
Straight-line depreciation spreads the cost evenly over the useful life — the same expense every year. Declining balance (specifically double declining balance) front-loads the depreciation, recording larger expenses in the early years and smaller ones later. Use straight-line for simplicity; use declining balance when assets lose value fastest early on.
Sum-of-years-digits (SYD) is an accelerated depreciation method that falls between straight-line and declining balance. It calculates each year's depreciation as a fraction of the depreciable base, where the numerator is the remaining useful life and the denominator is the sum of all years' digits. For a 5-year life, SYD = 1+2+3+4+5 = 15.
Section 179 allows businesses to deduct the full purchase price of qualifying equipment and software in the year it is placed in service, rather than depreciating it over several years. For 2024, the deduction limit is $1,220,000. This is an alternative to traditional depreciation — not the same thing — and is often used by small businesses to accelerate tax deductions.
Salvage value (also called residual value or scrap value) is the estimated value of an asset at the end of its useful life. For example, a company vehicle might have a salvage value of $5,000 after 5 years. The depreciable base is the asset cost minus the salvage value — you only depreciate the portion that actually loses value.
The IRS publishes guidelines in Publication 946 that specify useful lives (recovery periods) for different asset types. Common examples: computers and office equipment (5 years), office furniture (7 years), residential rental property (27.5 years), commercial buildings (39 years). Your accountant can help determine the correct classification for your specific assets.

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