Free Depreciation Calculator
Calculate asset depreciation instantly using straight-line or declining balance methods with our free financial calculator.
When to use this calculator
Depreciation spreads capital asset cost over useful life for P&L and tax reporting. Controllers and bookkeepers use it when onboarding equipment, vehicles, or leasehold improvements. Recalculate when useful life estimates change after major refurbishments.
Methodology and inputs
Straight-line annual depreciation = (cost − salvage) ÷ useful life. Declining-balance methods apply a rate to net book value each period — match the policy your jurisdiction and lender covenants require.
Worked example
A print shop buys a cutter for $86,000, salvage $6,000, life 8 years straight-line. Annual depreciation = ($86,000 − $6,000) ÷ 8 = $10,000 — $833/month added to overhead, lifting break-even on job quotes that previously ignored capital wear.
How to interpret the result
Book depreciation timing differs from cash capex — low depreciation with aging assets can overstate EBITDA. If net book value nears salvage but maintenance spikes, revisit remaining life assumptions.
Reviewed by ZBI Tools · Practical finance and operations calculators for SMB teams.
Further reading
For a deeper walkthrough of the concepts behind this tool, see our guide: Read the full analysis guide.
Related hub: Browse all calculators · Analyzers & calculators home · About Zen Box Infinity
Practical questions
Start depreciation mid-year?
Many firms use pro-rata first-year convention — align with your accountant's fixed-asset policy.
Include installation costs?
Capitalize qualifying setup and freight into depreciable basis unless expensed under your threshold.
Can salvage be zero?
Yes for assets with no resale value at end of life — increases annual charge versus nonzero salvage.
How it works
Straight-Line: Depreciation = (Asset Cost − Salvage Value) ÷ Useful Life
Declining Balance: Depreciation per period = Book Value × (Rate ÷ 100). Remaining value = Cost − cumulative depreciation.
Annual depreciation shown represents depreciation in the first period. Remaining value represents the book value after the selected number of periods.
FAQ
What is depreciation?
Depreciation is the allocation of an asset's cost over its useful life.
How do you calculate straight-line depreciation?
Subtract salvage value from cost and divide by useful life in years.
What is declining balance depreciation?
A method that applies a fixed percentage to the remaining book value each period, so depreciation is higher in early years.