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Straight-Line Depreciation Calculator

Find the annual depreciation expense and remaining book value of an asset.

How it is calculated

Straight-line depreciation charges the same amount every year: depreciable base = cost − salvage, annual = base / life, monthly = annual / 12, book value after year 1 = cost − annual. Cost and salvage are in dollars and life is in years (decimals such as 2.5 work). Salvage is optional: if it is blank or negative it is treated as 0. The tool returns no result if cost or life is zero or negative, or if salvage is equal to or greater than cost, because there would be nothing to depreciate. It shows only the first-year book value, not a year-by-year table, and it does not apply tax-specific rules or partial-year conventions.

Worked example

A machine costs 30000, will be worth 3000 at the end of its life, and is used for 5 years. Depreciable base = 30000 − 3000 = $27,000.00. Annual depreciation = 27000 / 5 = $5,400.00. Monthly = 5400 / 12 = $450.00. Book value after the first year = 30000 − 5400 = $24,600.00. Each following year reduces the book value by the same $5,400.00 until it reaches the 3000 salvage value.

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Common mistakes

  • Depreciating the full cost and forgetting the salvage value. The base is cost minus salvage, so ignoring salvage overstates the yearly expense.
  • Entering the life in months. The field is in years, so a 60-month asset is 5.
  • Entering salvage equal to or above the cost. The tool gives no result then, since the asset would have nothing left to write off.
  • Reading the book value as the value at the end of the whole life. It is the value after the first year only.
  • Assuming the figure matches your tax return. Tax depreciation often uses different lives, methods and first-year rules than straight-line book depreciation.

Sources

About this calculator

This calculator finds straight-line depreciation — the most common depreciation method — using annual depreciation = (cost − salvage value) / useful life, spreading an asset's loss in value evenly across every year of its useful life instead of front- or back-loading the expense. It also shows the monthly figure, the depreciable amount, and the book value after the first year.

Small business owners and bookkeepers use it to record depreciation expense on financial statements and tax filings, and accounting students use it as the baseline method before learning accelerated approaches like double-declining balance. Because every year's expense is the same, subtracting the annual figure once per year traces the book value forward.

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Comments (1)

  • Editorial team

    The life you choose moves the expense a lot. Cost 30000, salvage 3000: a 5-year life gives 5,400.00 USD a year, a 4-year life gives 6,750.00 USD, and the 5-year monthly figure is 450.00 USD. For an asset bought part-way through the year, multiply the monthly figure by the months in service for that first year. Your accountant decides which life applies. Which asset are you depreciating?

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