How to use this calculator
- Pick a depreciation method: straight-line, declining balance, or sum of the years' digits.
- Enter the asset cost, the salvage value you expect it to be worth at the end of its useful life, and the useful life in years.
- If you chose declining balance, set the depreciation factor — 2 is the standard double-declining balance rate.
- Check 'Partial first year' if the asset went into service partway through year one, and pick how many months it was in service.
- Check 'Round to whole dollars' if you want a schedule in whole dollars instead of exact cents.
- Review the year 1 depreciation, total depreciation, the book-value chart, and the full schedule. Share the link or export the schedule as CSV.
How it's calculated
Straight-line splits the depreciable base evenly across the useful life: Depreciation per year = (Cost − Salvage) ÷ Useful life. A $50,000 asset with a $5,000 salvage value over 5 years depreciates $9,000 every single year — the simplest method and the one most businesses use for financial reporting.
Declining balance applies a fixed rate to the asset's remaining book value each year, so the dollar amount shrinks over time: Depreciation = Book value × (Factor ÷ Useful life). With a factor of 2 (double-declining balance) on that same $50,000 asset, year 1 takes $20,000 — more than double straight-line's $9,000 — because the rate applies to the full, undepreciated balance. Unlike straight-line, salvage value isn't subtracted up front; instead, the calculator stops reducing book value once it would drop below salvage, and shows $0 for every year after that.
Sum-of-the-years'-digits (SYD) also front-loads depreciation, but more gradually than declining balance. Each year gets a shrinking fraction of the depreciable base — year i's fraction is (n − i + 1) ÷ (n × (n + 1) ÷ 2), where n is the useful life. On the same $50,000 asset, year 1 takes $15,000 (5⁄15 of the $45,000 depreciable base), landing between straight-line's $9,000 and double-declining's $20,000.
All three methods deduct the exact same total over the asset's life — the $45,000 depreciable base in this example — only the timing changes. Accelerated methods (declining balance, SYD) move more of the expense into the early years because many assets genuinely lose value and productivity fastest when new, and because accelerating the deduction reduces taxable income sooner.
A partial first year prorates year one by the fraction of the year the asset was actually in service, then pushes the unused fraction into one extra year at the end of the schedule — so the total depreciated never changes, only how it's split across calendar years.
Assumptions
- Salvage value is what you expect the asset to be worth at the end of its useful life, also called residual or scrap value. An asset with no salvage value depreciates its full cost.
- For declining balance, the depreciation rate is applied to the full cost, not cost minus salvage — but the calculator automatically stops once book value would fall below salvage, so you never see negative depreciation or a book value under salvage.
- If salvage value is $0, declining balance can leave a small amount of book value never depreciated — the method only approaches zero, it doesn't force a deduction once the rate itself stops closing the gap.
- Partial-year proration assumes the asset entered service on a specific month within year one and uses a simple months-in-service fraction; it does not model a specific company's fiscal year-end or a mid-quarter/mid-month tax convention.
- This calculator is for financial-statement depreciation (book depreciation), not a tax return. Tax depreciation in the U.S. generally uses MACRS, which runs on IRS-published percentage tables rather than any of the formulas above.
- Results are for planning and educational purposes only, not tax or accounting advice.
Frequently asked questions
How does a straight line depreciation calculator work?
It divides the depreciable base (cost minus salvage value) evenly across the useful life: Depreciation per year = (Cost − Salvage) ÷ Useful life. Every year gets the identical dollar amount until book value reaches salvage value in the final year. It's the most widely used method for financial reporting because it's simple and predictable.
What's the difference between declining balance and double-declining balance?
Declining balance applies a rate (the depreciation factor divided by the useful life) to the asset's current book value each year. Double-declining balance is just declining balance with a factor of 2 — set the depreciation factor to 2 in this calculator and you get the double-declining balance method, the most common declining-balance variant in practice.
What is sum-of-the-years'-digits (SYD) depreciation?
SYD is an accelerated method that gives each year a shrinking fraction of the depreciable base, based on the sum of the useful life's digits. A 5-year asset uses digits 1+2+3+4+5=15 as the denominator, so year 1 gets 5/15 of the depreciable base, year 2 gets 4/15, and so on down to 1/15 in the final year. It front-loads less aggressively than double-declining balance but more than straight-line.
What is salvage value?
Salvage value (also called residual or scrap value) is what you expect an asset to be worth at the end of its useful life — for example, what you could sell it for or scrap it for parts. If an asset has no salvage value, its full cost gets depreciated. A higher salvage value means a smaller depreciable base and smaller depreciation deductions each year.
Does this calculator support a macrs depreciation calculator method?
No, and deliberately so. MACRS (Modified Accelerated Cost Recovery System) is the depreciation method the IRS requires for most U.S. tax returns, but it runs on fixed percentage tables published by the IRS for each asset class — it isn't a formula like straight-line or declining balance that a calculator can derive on the fly. See IRS Publication 946, 'How To Depreciate Property,' for the official MACRS tables and asset-class rules.
How does rental property depreciation work?
Residential rental property is depreciated under MACRS using straight-line over a fixed 27.5-year recovery period (39 years for most commercial property) — this is set by IRS rule, not a choice between the methods on this page. A rental property depreciation calculator built for tax purposes needs to apply that specific 27.5-year schedule; see IRS Publication 527, 'Residential Rental Property,' for how it works, including how land value is excluded from the depreciable base.
What is bonus depreciation?
Bonus depreciation is a separate tax provision that lets a business deduct a percentage of an eligible asset's cost in the year it's placed in service, on top of (or instead of) regular depreciation. It's set by tax law, changes by year, and applies to specific categories of property — it isn't one of the three book-depreciation methods calculated here. Check current IRS guidance or a tax professional for the applicable bonus depreciation percentage and eligibility rules.
How does partial-year (mid-year) depreciation work?
When an asset goes into service partway through year one, this calculator prorates year one's depreciation by the fraction of the year the asset was actually in service, then adds one extra year at the end of the schedule to pick up the leftover fraction. The total depreciated over the asset's life never changes — only how it's split across calendar years.
Which depreciation method should I use?
Straight-line is the default for financial statements because it's simple and predictable. Declining balance or SYD make more sense when an asset genuinely loses most of its value or usefulness early — equipment, vehicles, and technology are common candidates. For a tax return, the method usually isn't a choice at all: MACRS applies to most business assets regardless of which method you'd pick for your own books.
Does the total depreciation change depending on the method?
No. Every method here deducts exactly the same total — cost minus salvage value — over the asset's useful life. Only the timing changes: accelerated methods (declining balance, SYD) take more in the early years and less later, while straight-line takes the same amount every year.
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Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice. Actual results depend on your personal circumstances and can change over time. Consult a qualified professional before making financial decisions.