📉 Straight-Line Depreciation Calculator
By ToolNimba Finance Team · Reviewed by ToolNimba Editorial Review, accounting and finance content · Updated 2026-06-19
This calculator is for general estimating and education only and is not accounting, tax or financial advice. Real depreciation depends on your jurisdiction's tax rules, the asset class, partial-year and mid-month conventions, and the method your accountant or tax authority requires. Confirm figures with a qualified accountant before filing or reporting.
| Year | Depreciation | Accumulated | Book value |
|---|
Straight-line depreciation spreads the cost of an asset evenly over its useful life. Enter the asset cost, the salvage (residual) value you expect at the end, and the number of years you will use it. This calculator returns the annual depreciation expense and a full year-by-year schedule showing accumulated depreciation and the remaining book value, so you can see exactly how the asset writes down to its salvage value.
What is the Straight Line Depreciation Calculator?
Depreciation is how accounting recognises that a long-lived asset, such as a machine, vehicle or piece of equipment, loses value as it is used. Instead of expensing the whole purchase in the year you buy it, you spread the cost across the years the asset actually earns its keep. This matches the expense to the revenue the asset helps produce, which is the matching principle at the heart of accrual accounting.
The straight-line method is the simplest and most widely used approach. It assumes the asset loses an equal amount of value every year. You take the depreciable base, which is the cost minus the salvage value, and divide it by the useful life in years. The result is a fixed annual depreciation expense that stays the same every year until the book value reaches the salvage value. Because the charge is constant, straight-line is easy to forecast and audit, which is why it is the default for buildings, furniture, and many general-purpose assets.
Two figures matter beyond the annual expense. Accumulated depreciation is the running total of all depreciation taken so far, and book value (or carrying value) is the cost minus accumulated depreciation, that is, what the asset is still worth on the books. Over the life of the asset the book value falls in a straight line from the original cost down to the salvage value, never below it. Straight-line differs from accelerated methods like declining balance or sum-of-the-years-digits, which front-load larger deductions into the early years.
When to use it
- Working out the annual depreciation expense to record on a profit and loss statement for a vehicle, machine or computer.
- Building a depreciation schedule for a small business or rental property to track accumulated depreciation and book value each year.
- Estimating the book value of an asset partway through its life when planning a sale or insurance claim.
- Comparing the steady straight-line charge against an accelerated method before choosing how to depreciate a new asset.
How to use the Straight Line Depreciation Calculator
- Enter the total cost of the asset, including any amounts needed to get it ready for use.
- Enter the salvage value: what you expect the asset to be worth at the end of its useful life.
- Enter the useful life in whole years.
- Read off the annual depreciation, then review the schedule for accumulated depreciation and book value each year.
Formula & method
Worked examples
A machine costs $10,000, has an expected salvage value of $1,000, and a useful life of 5 years.
- Depreciable base = cost - salvage = 10,000 - 1,000 = 9,000
- Annual depreciation = 9,000 / 5 = 1,800 per year
- Annual rate = 1,800 / 10,000 x 100 = 18%
- End of year 1 book value = 10,000 - 1,800 = 8,200
- End of year 5 book value = 10,000 - (1,800 x 5) = 1,000 (equals salvage)
Result: Annual depreciation $1,800; book value falls from $10,000 to $1,000 over 5 years.
A delivery van costs $25,000, has a salvage value of $5,000, and a useful life of 8 years.
- Depreciable base = 25,000 - 5,000 = 20,000
- Annual depreciation = 20,000 / 8 = 2,500 per year
- Annual rate = 2,500 / 25,000 x 100 = 10%
- Accumulated depreciation after 4 years = 2,500 x 4 = 10,000
- Book value after 4 years = 25,000 - 10,000 = 15,000
Result: Annual depreciation $2,500; book value after 4 years is $15,000.
Depreciation schedule for a $10,000 asset, $1,000 salvage, 5-year life (18% annual)
| Year | Depreciation | Accumulated depreciation | Book value |
|---|---|---|---|
| 1 | $1,800 | $1,800 | $8,200 |
| 2 | $1,800 | $3,600 | $6,400 |
| 3 | $1,800 | $5,400 | $4,600 |
| 4 | $1,800 | $7,200 | $2,800 |
| 5 | $1,800 | $9,000 | $1,000 |
How useful life changes the annual charge on a $20,000 depreciable base
| Useful life | Annual depreciation | Annual rate |
|---|---|---|
| 3 years | $6,667 | 33.33% |
| 5 years | $4,000 | 20.00% |
| 10 years | $2,000 | 10.00% |
| 20 years | $1,000 | 5.00% |
Common mistakes to avoid
- Depreciating the full cost instead of the depreciable base. Straight-line spreads cost minus salvage value, not the full cost. If you divide the whole purchase price by the life you over-depreciate and push book value below salvage. Always subtract the salvage value first.
- Setting salvage value to zero by default. Many assets have a real resale or scrap value at the end of their life. Assuming zero salvage inflates the annual expense. Use a realistic estimate, even if it is small.
- Confusing useful life with the warranty or tax life. Useful life is how long you expect to use the asset productively, which can differ from a warranty period or the recovery period a tax authority assigns. Pick the figure that matches your purpose, and be consistent.
- Ignoring partial-year conventions. If an asset is bought mid-year, the first and last years are often pro-rated (for example a half-year convention). This simple calculator assumes full years, so adjust the first and last entries if your rules require it.
Glossary
- Depreciation
- The systematic allocation of an asset cost over the years it is used, recognised as an expense each period.
- Salvage value
- The estimated amount an asset will be worth at the end of its useful life, also called residual or scrap value.
- Useful life
- The number of years an asset is expected to be productively used before it is retired or replaced.
- Depreciable base
- The cost of the asset minus its salvage value, that is, the total amount that will be depreciated.
- Accumulated depreciation
- The running total of all depreciation charged on an asset since it was acquired.
- Book value
- The asset cost minus accumulated depreciation, representing its carrying value on the balance sheet.
Frequently asked questions
How do you calculate straight-line depreciation?
Subtract the salvage value from the asset cost to get the depreciable base, then divide that by the useful life in years. The result is the same depreciation expense recorded every year. For example, a $10,000 asset with a $1,000 salvage value and a 5-year life depreciates by (10,000 - 1,000) / 5 = $1,800 each year.
What is the difference between book value and salvage value?
Salvage value is a fixed estimate of what the asset will be worth at the very end of its useful life. Book value changes every year: it is the cost minus accumulated depreciation at any point in time. Under straight-line, book value falls steadily until it reaches the salvage value in the final year.
Can salvage value be zero?
Yes. If you expect the asset to have no resale or scrap value at the end, you can set salvage to zero, and the full cost becomes the depreciable base. Just make sure zero is realistic rather than a default, since many assets do retain some value.
Why is straight-line depreciation used so often?
It is simple, predictable and easy to audit because the expense is identical every year. That makes financial forecasting and bookkeeping straightforward, which is why it is the default for buildings, furniture, fixtures and many general assets.
How is straight-line different from declining-balance depreciation?
Straight-line charges an equal amount each year. Declining-balance (and other accelerated methods) charge more in the early years and less later, which suits assets that lose value quickly or that you want to write off faster for tax purposes. Total depreciation over the asset life is the same, only the timing differs.
What happens in the final year of the schedule?
In the last year the book value should land exactly on the salvage value. This calculator pins the final-year book value to the salvage figure so small rounding differences do not leave the asset slightly above or below its expected residual value.
Sources
- Straight Line Basis , Investopedia
- Publication 946: How To Depreciate Property , U.S. Internal Revenue Service