Straight-line depreciation is the simplest and most widely used way to allocate an asset’s cost: the same amount every year of its useful life. It is the default for most US companies’ financial statements and the method behind tax depreciation of buildings. This calculator gives you the annual and monthly charge, prorates a partial first year, and lays out the complete book value schedule.
How to use the straight-line depreciation calculator
- Enter the asset cost — the purchase price plus freight, installation, setup and testing.
- Enter the salvage value: what you expect to sell or scrap it for at the end.
- Enter the useful life in years; fractional lives such as 7.5 are allowed.
- Choose the months in service in the first fiscal year if you bought it partway through the year.
The schedule lists beginning book value, the share of the depreciable base taken that year, the depreciation, accumulated depreciation and ending book value.
Straight-line formula
For a partial first year with m months in service, year 1 is Annual × m/12, and the final year picks up the remaining (12 − m)/12.
Worked example
A landscaping company buys a mower for $18,000, expects to sell it for $3,000 after 6 years, and uses it all of the first year.
- Depreciable base: $18,000 − $3,000 = $15,000
- Annual depreciation: $15,000 ÷ 6 = $2,500 (16.667% of the base)
- Monthly depreciation: $208.33
- Book value: $15,500 after year 1, $13,000 after year 2 … $3,000 after year 6
Had the mower arrived with only 4 months left in the fiscal year, year 1 would carry $833.33, years 2–6 $2,500 each and year 7 the last $1,666.67 — seven fiscal years in total, still $15,000 overall.
When straight-line is the right choice
- Even use over time. Office furniture, buildings, leasehold improvements and many fixtures provide roughly equal service every year.
- Simplicity and comparability. Equal charges make budgets, forecasts and year-over-year comparisons easy, which is why straight-line dominates financial reporting.
- Intangible assets. Amortization of finite-lived intangibles such as patents and software licenses usually follows the same straight-line pattern.
It fits less well when an asset loses most of its value early, such as vehicles and computers; the double declining balance calculator shows the accelerated alternative.
Estimating life and salvage value
Useful life is a business estimate based on experience, manufacturer guidance and how hard the asset will be used — not necessarily how long it could physically last. Salvage value is often small or zero. Both estimates can be revised; under US GAAP the change applies going forward, spreading the remaining book value over the new remaining life rather than restating prior years.
Straight-line in tax rules
For US federal taxes, residential rental buildings (27.5 years) and nonresidential real property (39 years) are depreciated straight-line under MACRS with a mid-month convention, and taxpayers can elect straight-line for other property classes. Tax rules ignore salvage value and use set conventions, so tax and book figures usually differ. The rental property depreciation calculator applies the IRS real estate rules, and the depreciation calculator compares straight-line with three accelerated methods.
Schedules are estimates for planning and bookkeeping, not accounting or tax advice.
Frequently asked questions
What is the straight-line depreciation formula?
Annual depreciation = (cost − salvage value) ÷ useful life. An asset costing $18,000 with a $3,000 salvage value and a 6-year life depreciates $2,500 a year.
How do I calculate monthly straight-line depreciation?
Divide the annual amount by 12. In the example, $2,500 ÷ 12 = $208.33 a month, which is how many businesses record it in monthly closing entries.
What happens if the asset is bought mid-year?
The first year's depreciation is prorated by the months in service, and the leftover months spill into an extra year at the end. With 4 months in year 1, the example records $833.33 in year 1, $2,500 in years 2 to 6 and $1,666.67 in year 7.
What is the straight-line depreciation rate?
It is 1 ÷ useful life, applied to the depreciable base (cost minus salvage). A 6-year life is about 16.67% a year; a 10-year life is 10%.
Can the useful life be a fraction of a year?
Yes. Enter a life such as 7.5 years. The calculator spreads the base evenly at that rate and takes a smaller charge in the final year to land exactly on the salvage value.