Depreciation Calculator
Build depreciation schedules using straight line, declining balance, SYD or units of production.
About Depreciation Calculator
Depreciation allocates an asset's cost over its useful life. Straight-line (SL) deducts equal amounts every year. Double-declining balance (DDB) deducts a fixed percentage of the remaining book value — highest in early years, tapering off. Sum-of-years-digits (SYD) front-loads deductions using a fraction that decreases each year. Units-of-production ties the annual charge to actual usage, useful for machinery with measurable output. All methods ultimately depreciate the asset to salvage value; they differ only in timing.
Formulas
Straight-Line
Annual depreciation = (Cost − Salvage) / Useful life
- C
- Asset cost
- S
- Salvage value
- n
- Useful life in years
Double-Declining Balance
Depreciation = Beginning book value × (factor / life), capped at (book value − salvage)
- B_{t-1}
- Book value at start of year
- f
- Declining balance factor (2 for DDB)
- n
- Useful life
Sum-of-Years-Digits
Depreciation = Depreciable base × (remaining life / sum of years)
- t
- Current year
- n
- Total useful life
- n(n+1)/2
- Sum of years digits
Units of Production
Depreciation = Depreciable base × (units this year / total lifetime units)
- u_t
- Units produced in year t
- U
- Total lifetime units
Worked example
With the default values below, Depreciation Calculator returns Year 1 Depreciation of $9,000.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Depreciation Methodone of Straight-Line (SL), Double Declining Balance (DDB), Sum-of-Years-Digits (SYD), Units of Production
- Straight-Line (SL)
- Asset Costminimum 0 $
- 50,000 $
- Salvage Valueminimum 0 $
- 5,000 $
- Useful Life (years)accepts 1–50
- 5
- Declining Balance Factoraccepts 1–3
- 2
- Total Lifetime Unitsminimum 1
- 100,000
- Annual Units (comma-separated)
- 20000,25000,22000,18000,15000
Results
- Year 1 Depreciation
- $9,000.00
- Total Depreciation
- $45,000.00
- Final Book ValueShould equal salvage value for SL, SYD, and DDB when fully depreciated.
- $5,000.00
- Depreciable Base
- $45,000.00
Step by step
- 1Depreciable base= $45,000
- 2Year 1 depreciation= $9,000.00Depreciable base ÷ 5 years
- 3Final book value= $5,000.00
Assumptions and limits
- The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
When should I use declining balance instead of straight-line?
Declining balance is preferred when an asset generates more revenue or has higher maintenance costs early in its life — technology hardware, vehicles, and heavy equipment are common examples. Front-loading the deduction also has a time-value-of-money benefit: earlier deductions save taxes sooner.
Why does the DDB method sometimes switch to straight-line near the end?
DDB's formula never reaches the salvage value on its own — it approaches it asymptotically. In practice (and under MACRS rules), companies switch to SL when SL would give a larger deduction, ensuring the asset is fully depreciated. This calculator caps depreciation so the book value never drops below salvage, which has the same effect.
What is SYD and when is it used?
SYD stands for sum-of-years-digits. For a 5-year asset the sum is 1+2+3+4+5=15. Year 1 gets 5/15, year 2 gets 4/15, and so on. It front-loads deductions like DDB but follows a straight-line trajectory downward rather than an exponential one. It's less common today but was widely used before MACRS.
What is the depreciable base?
The depreciable base is cost minus salvage value — the total amount to be expensed over the asset's life. Salvage value represents what the asset is expected to be worth when you're done with it. You never depreciate below salvage value.