This depreciation calculator creates a full year-by-year depreciation schedule for an asset using straight-line, double declining balance, 150% declining balance or sum-of-the-years’ digits. Enter the cost, salvage value and useful life.
Depreciation methods and formulas
| Method | Yearly depreciation | Pattern |
|---|---|---|
| Straight-line | (cost − salvage) ÷ life | Same every year |
| Double declining balance | book value × 2 ÷ life | High early, low later |
| 150% declining balance | book value × 1.5 ÷ life | Moderately front-loaded |
| Sum-of-the-years’ digits | (cost − salvage) × remaining life ÷ SYD | Front-loaded, falls evenly |
With declining balance methods, the calculator switches to straight-line once that gives a larger deduction, which is standard practice and ensures the asset is depreciated down to its salvage value.
Worked example
A $10,000 machine with a $1,000 salvage value and a 5-year life depreciates by $1,800 a year with straight-line. With double declining balance, year 1 is $4,000 (40% of $10,000), year 2 is $2,400, and so on until the book value reaches $1,000.
Which method should I use?
- Straight-line is simplest and best when an asset is used evenly over its life, such as buildings and furniture.
- Accelerated methods suit assets that lose value or usefulness quickly, such as vehicles and computers.
- For US taxes, most business property uses MACRS, with set recovery periods and tables. Section 179 and bonus depreciation can allow larger first-year deductions. Ask your accountant which applies.
Frequently asked questions
What is salvage value?
It is the amount you expect to get for the asset at the end of its useful life. Depreciation stops when the book value reaches it.
How do I find an asset’s useful life?
For accounting, it is your estimate of how long the asset will be productive. For US tax purposes, the IRS sets recovery periods by asset class in Publication 946.
Why does double declining balance not reach zero?
It never depreciates below salvage value. If salvage is zero, the switch to straight-line in later years brings the book value to zero by the end of the life.
Can I use this for my tax return?
Use it for planning and bookkeeping. US tax depreciation generally follows MACRS, which uses its own percentages and conventions.
Is depreciation a cash expense?
No. It spreads the cost of an asset you already paid for across its useful life. It reduces reported profit and taxable income without any cash leaving the business that year.
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Last reviewed: October 2026. This calculator is for education only and is not financial, tax or legal advice.