Depreciation Calculator

Straight-line, double-declining balance, and sum-of-years'-digits schedules for business assets

Updated 2026-09-28

Asset cost

Salvage value

Useful life

years

Method

Method: Straight-line
Year 1 depreciation: $2,000.00
Total depreciable amount: $10,000.00

Book depreciation methods. US tax returns use MACRS / Section 179 rules instead — see IRS Publication 946.

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Straight-line schedule
Year	Depreciation	Accumulated	Book value
Year 1	$2,000.00	$2,000.00	$10,000.00
Year 2	$2,000.00	$4,000.00	$8,000.00
Year 3	$2,000.00	$6,000.00	$6,000.00
Year 4	$2,000.00	$8,000.00	$4,000.00
Year 5	$2,000.00	$10,000.00	$2,000.00

Depreciation spreads the cost of a long-lasting asset — a van, an oven, a register, a laptop — over the years it earns money for you. The calculator builds a year-by-year schedule using the three standard book-depreciation methods so you can see how each one front-loads (or evens out) the expense.

Straight-line depreciation

The simplest method: the same expense every year. Annual depreciation = (cost − salvage value) ÷ useful life. Equipment costing $12,000 with a $2,000 salvage value and a five-year life depreciates $2,000 a year.

Straight-line suits assets that wear evenly, like furniture and fixtures, and it is what most small businesses use in their own management accounts.

Double-declining balance (DDB)

DDB applies twice the straight-line rate to the remaining book value each year. For a five-year life the rate is 40%. The asset is never depreciated below its salvage value, so the final years are cut short.

It fits assets that lose value fastest when new — vehicles, computers, and most technology.

$12,000 asset, $2,000 salvage, 5-year life
Year	Straight-line	Double-declining	Sum-of-years'-digits
1	$2,000.00	$4,800.00	$3,333.33
2	$2,000.00	$2,880.00	$2,666.67
3	$2,000.00	$1,728.00	$2,000.00
4	$2,000.00	$592.00	$1,333.33
5	$2,000.00	$0.00	$666.67
Total	$10,000.00	$10,000.00	$10,000.00

Sum-of-years'-digits (SYD)

SYD is accelerated like DDB but smoother. Add the years of life together (1 + 2 + 3 + 4 + 5 = 15). Year one takes 5/15 of the depreciable amount, year two 4/15, and so on down to 1/15.

Every method depreciates the same total — cost minus salvage. They only differ in timing.

Book depreciation versus tax depreciation

These are accounting (book) methods. US federal tax returns use the IRS system called MACRS, with fixed recovery periods and conventions, and many small businesses can instead expense qualifying equipment in the year of purchase under Section 179 or bonus depreciation. The limits and rules for those change by law and by year.

Use this calculator to understand and plan. For the numbers on a tax return, use IRS Publication 946 and your tax software or accountant.

Choosing a useful life and salvage value

Both are estimates, and small changes move the schedule a lot.

Useful life is how long the asset will earn money for you, not how long it could physically last
Salvage value is what you realistically expect to sell or trade it for at the end
Keep the purchase invoice, delivery and installation costs — they are part of the asset's cost
Record assets in a register with date bought, cost, method, and life so the schedule is easy to update

Keep the numbers in a spreadsheet

Ready-made Excel and Google Sheets templates that pick up where this calculator stops. One-off purchase, instant download.

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Frequently asked questions

How do I calculate straight-line depreciation?

Subtract the salvage value from the cost and divide by the useful life in years. $12,000 cost, $2,000 salvage, 5 years: (12,000 − 2,000) ÷ 5 = $2,000 a year.

What is the double-declining balance rate?

Two divided by the useful life. A 5-year asset uses 40%, a 10-year asset 20%, applied to the remaining book value each year.

Which depreciation method should a small business use?

For internal accounts, straight-line is simplest and most common. Accelerated methods match assets that lose value quickly. For tax returns, follow IRS rules (MACRS, Section 179) rather than choosing freely.

Is this the same as MACRS?

No. MACRS uses IRS-set recovery periods, conventions and tables. This calculator shows the standard book methods only.

Can land be depreciated?

No. Land is not depreciated. Buildings, equipment, vehicles, furniture and similar assets that wear out are.

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