Quick answer
Straight-line depreciation per year = (cost − salvage value) ÷ useful life. An asset costing $10,000 with a $1,000 salvage value and a 5-year life depreciates $1,800 a year, on a depreciable amount of $9,000.
Enter the asset cost, salvage value and useful life. The calculator returns annual depreciation and the depreciable amount.
Related tools: Tip Calculator: Tip, total and per-person share. Discount Calculator: Final price after one or two successive discounts. Car Depreciation Calculator: Estimated value after years of declining-balance depreciation at a rate you enter.
How to use the Depreciation Calculator
- Enter asset cost ($) (above 0).
- Enter salvage value ($) (0 or more).
- Enter useful life (years) (a whole number, between 1 and 100).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Asset cost | A number, in $ | > 0 |
| Salvage value | A number, in $ | ≥ 0 |
| Useful life | A whole number, in years | ≥ 1, ≤ 100 |
Formula and method
Formula
annual depreciation = (cost − salvage) ÷ life
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
Equal annual expense over the useful life (straight-line method).
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Asset cost = 10000; Salvage value = 1000; Useful life = 5.
| Result | Value |
|---|---|
| Annual depreciation | $1,800.00 |
| Depreciable amount | $9,000.00 |
Example 2
Inputs: Asset cost = 5000; Salvage value = 0; Useful life = 4.
| Result | Value |
|---|---|
| Annual depreciation | $1,250.00 |
| Depreciable amount | $5,000.00 |
The first line is the headline result (annual depreciation). Below it the depreciation Calculator lists depreciable amount, which describe the same case from other angles. IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
The schedule
Book value falls $1,800 a year: $8,200 after year 1, $6,400 after year 2 and $1,000 after year 5. Accelerated methods such as double-declining balance front-load the expense.
Tax versus book
Tax depreciation follows its own rules (such as MACRS in the US), which can differ from the book schedule. Salvage value must be below cost.
How the result changes with asset cost
Holding every other input at the first worked example, this table changes only asset cost. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Asset cost | Annual depreciation | Depreciable amount |
|---|---|---|
| 5000 | $800.00 | $4,000.00 |
| 10000 | $1,800.00 | $9,000.00 |
| 20000 | $3,800.00 | $19,000.00 |
| 40000 | $7,800.00 | $39,000.00 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Salvage value: entering "1000" shows "Salvage value must be less than the cost." beside that field and no result.
Choosing between the Depreciation Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Tip Calculator](/finance/tip-calculator/) | bill amount, tip and split between | Tip |
| [Discount Calculator](/finance/discount-calculator/) | original price and discount | Final price |
| [Car Depreciation Calculator](/automotive/car-depreciation-calculator/) | purchase price, yearly depreciation and years | Estimated value |
| [Decimal to Hex Converter](/technology/decimal-to-hex-calculator/) | input base and value | Hexadecimal |
| [Pixels Per Inch (PPI) Calculator](/technology/pixels-per-inch/) | horizontal pixels, vertical pixels and diagonal size | Pixel density |
Background: personal finance estimates
Financial calculators project from the numbers you give them. Long-range tools depend on guesses about returns and tax rates that are unlikely to hold exactly, payoff tools assume a fixed payment and rate, and tax or salary results depend on the tax year, filing status and country. Official calculators say their output is for reference only.
For decisions that matter, use conservative inputs and check the figures against your lender, plan documents or a qualified adviser.
Assumptions and limitations
- Salvage must be below cost
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser.
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for salvage value to confirm this.
Frequently asked questions
What is salvage value?
The estimated value at the end of the useful life.
Is land depreciated?
No. Land is not depreciable because it doesn't wear out; only buildings and equipment on it are.
What is useful life?
How long the asset is expected to be in service.
What does the Depreciation Calculator calculate?
Straight-line depreciation schedule. It returns Annual depreciation and Depreciable amount.
What formula does the Depreciation Calculator use?
annual depreciation = (cost − salvage) ÷ life. Equal annual expense over the useful life (straight-line method).
What do I need to enter in the depreciation Calculator?
You enter Asset cost ($), Salvage value ($) and Useful life (years).
How is the result rounded or limited?
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice. Salvage must be below cost.
What is an example of a depreciation result?
With asset cost 10000, salvage value 1000 and useful life 5, the annual depreciation is $1,800.00.
Can I rely on this calculator for a decision?
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser. For this calculator in particular: Salvage must be below cost.
Related calculators
- Tip Calculator — Tip, total and per-person share.
- Discount Calculator — Final price after one or two successive discounts.
- Car Depreciation Calculator — Estimated value after years of declining-balance depreciation at a rate you enter.
- Decimal to Hex Converter — Convert integers between binary, octal, decimal and hexadecimal.
- Pixels Per Inch (PPI) Calculator — Pixel density of a display.
- Efficiency Calculator — Efficiency as output divided by input.
Sources
- Standard time-value-of-money relations (e.g. Brealey, Myers & Allen, Principles of Corporate Finance)
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.