Free Depreciation Calculator
Find out how much of an asset's cost to record as an expense each year. No signup required. Enter the cost, salvage value, and useful life, and Encarmo builds the full depreciation schedule instantly.
| Year | Depreciation Expense | Accumulated | Ending Book Value |
|---|---|---|---|
| Year 1 | $3,600.00 | $3,600.00 | $16,400.00 |
| Year 2 | $3,600.00 | $7,200.00 | $12,800.00 |
| Year 3 | $3,600.00 | $10,800.00 | $9,200.00 |
| Year 4 | $3,600.00 | $14,400.00 | $5,600.00 |
| Year 5 | $3,600.00 | $18,000.00 | $2,000.00 |
Depreciation Summary
Annual expense & book value
How to calculate depreciation in 5 steps
Enter the asset's cost
What you actually paid for the asset, including setup or installation costs where applicable.
Enter the salvage value
What you expect the asset to be worth at the end of its useful life, even if that is $0.
Enter the useful life
How many years you expect to use the asset before replacing it, based on its type and how it's used.
Choose a depreciation method
Straight-line spreads the cost evenly; double-declining balance front-loads more depreciation into the early years.
Review the depreciation schedule
Encarmo shows how much depreciation to record each year and the asset's remaining book value.
What is depreciation?
Depreciation is how a business spreads the cost of a long-term asset, like equipment or a vehicle, across the years it's actually used, instead of expensing the entire cost the moment it's purchased. It matches the cost of the asset to the periods it helps generate revenue, which is why it shows up as an expense on the income statement even though no cash changes hands that year.
The three numbers behind depreciation
Cost — What was paid
The original capital outlay including freight, taxes, and installation costs before any deductions.
Salvage value — What's left at the end
The estimated residual value of the asset when retired, whether through resale, trade-in, or scrap.
Useful life — How long it's productive
The expected number of years the asset will remain actively productive in generating business revenue.
A simple straight-line depreciation schedule
Asset cost $20,000, salvage value $2,000, useful life 5 years ($3,600/year):
| Year 1 Depreciation | $3,600 (Ending Book Value: $16,400) |
| Year 2 Depreciation | $3,600 (Ending Book Value: $12,800) |
| Year 3 Depreciation | $3,600 (Ending Book Value: $9,200) |
| Year 4 Depreciation | $3,600 (Ending Book Value: $5,600) |
| Year 5 Depreciation | $3,600 (Ending Book Value: $2,000) |
After 5 years of $3,600 in annual depreciation, the book value lands exactly at the $2,000 salvage value, which is how straight-line depreciation is designed to work.
Straight-line vs. double-declining balance: what's the difference?
| Straight-Line | Double-Declining Balance | |
|---|---|---|
| Shows | Equal depreciation expense every single year | Larger depreciation in early years, smaller later |
| Formula | (Cost - Salvage) ÷ Useful Life | Beginning Book Value × (2 ÷ Useful Life) |
| Best for | Assets that lose value steadily, like furniture or buildings | Assets that lose value fastest early on, like vehicles or computers |
| Simplicity | Identical fixed amount recorded each year | Recalculated every year from remaining book value |
Why depreciation calculations matter
Accurate financial statements
Spreading an asset cost over its useful life keeps the income statement from showing an artificial loss the year a big purchase is made.
Tax planning
Depreciation reduces taxable income each year, and the method chosen affects how much of that benefit shows up sooner versus later.
Asset replacement planning
Tracking book value over time helps anticipate when an asset is fully depreciated and may need replacing.
Loan and investor conversations
Lenders and investors review depreciation schedules to understand how a business's asset base is aging.
Why use Encarmo's free depreciation calculator
Completely free, no limits
Run unlimited asset schedules with no paywall or watermark.
No signup required
Get the full schedule instantly in your browser as a guest.
Compares straight-line and double-declining
Switch between standard and accelerated methods in one click.
Full year-by-year schedule
Not just a single number, but the entire multi-year depreciation timeline.
Clean, downloadable PDF summary
Download the schedule for your books or tax accountant.
Questions people ask us
Clear, direct answers on methodology, formulas, and usage.
Is this depreciation calculator really free?
What is the difference between straight-line and double-declining balance depreciation?
Does this calculate tax depreciation?
What if I do not know the salvage value?
Can I depreciate an asset below its salvage value?
What counts as a depreciable asset?
How do I choose a useful life?
Does depreciation affect cash flow?
Do I need accounting software to track depreciation over time?
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