Depreciation Calculator
Straight-line depreciation spreads an asset's cost evenly across its useful life. It is the simplest and most common method, and it turns a large purchase into a predictable annual expense.
Annual depreciation
$2,750.00
- Monthly depreciation
- $229.17
- Depreciable base
- $22,000.00
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Annual = (Cost - Salvage) / Life
- Cost
- What the asset cost to acquire
- Salvage
- Expected value at the end of its life
- Life
- Useful life in years
- Base
- Cost minus salvage
How to check the result by hand
- 1
Establish the asset cost
Use the full acquisition cost, including delivery and installation where those are capitalised.
- 2
Estimate the salvage value
The expected residual value at the end of the useful life. It is often zero for technology and small equipment.
- 3
Subtract salvage from cost
The difference is the depreciable base, the amount that will actually be written off.
- 4
Divide by the useful life
The base divided by the life in years gives the annual straight-line expense.
- 5
Convert to a monthly figure
Divide the annual expense by twelve for the monthly charge used in management accounts.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Depreciation page.