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Depreciation spreads the cost of a business asset over its useful life instead of expensing it all at once — the straight-line method is the simplest and most widely used way to do this.
This calculator finds the annual and monthly depreciation for an asset given its cost, salvage value, and useful life.
How it works
Enter the asset's cost, its estimated salvage value at the end of its useful life (0 if none), and its useful life in years. The calculator subtracts the salvage value from the cost to find the depreciable value, then divides it evenly across the useful life.
- Enter asset cost ($).
- Enter salvage value ($).
- Enter useful life (years).
- Click Calculate to see your results.
Examples
A $10,000 asset over 5 years
With a $1,000 salvage value, this depreciates $1,800 per year — $150 per month.
Who should use it
- Estimating depreciation expense for financial statements.
- Planning the effective annual cost of a business asset purchase.
Industry applications
- Small business accounting
- Financial planning and asset management
Advantages
- Uses the simplest, most widely understood depreciation method.
- Shows both annual and monthly depreciation figures.
Limitations
- Doesn't model accelerated depreciation methods or tax-specific depreciation schedules.
Common mistakes to avoid
- Depreciating the full asset cost instead of the depreciable value (cost minus salvage value).
- Confusing straight-line financial depreciation with tax depreciation rules, which often differ.
Best practices
- Choose a useful life estimate based on how long the asset will realistically remain in productive use, not just its physical lifespan.
Tips
- For tax purposes, check whether your jurisdiction requires a specific depreciation method (like MACRS in the US) rather than straight-line.