Depreciation Calculator

Two Depreciation Methods

This depreciation calculator compares annual prime cost and diminishing value deductions for one asset. Choose a headline method and compare both schedules below it. Each closing adjustable value is the asset’s tax cost less its total decline in value.

Prime cost, also called straight line depreciation, uses the original tax cost multiplied by days held divided by 365, then divided by effective life. Diminishing value applies twice that annual rate to the opening adjustable value. The first year uses the original tax cost as its base.

Each method caps the year’s decline at the remaining adjustable value. Leap years can contain 366 eligible days, while the formula keeps its 365 denominator. The ATO’s general depreciation methods explain these calculations.

The comparison supports assets acquired from 10 May 2006 that qualify for either method. Some intangible assets require prime cost. An existing asset must keep its chosen method. Cost additions, effective-life changes, rollover relief, pools and immediate write-offs need separate calculations.

Business Use and Ownership Period

The calculator reduces each year’s deduction by the business-use percentage you enter. It reduces the gross adjustable value by the full decline in value, including private use. A change from 80% to 100% business use increases the deduction without changing that gross closing value.

Enter acquisition and first-use dates separately. Decline starts when the asset is first used or installed ready for any use, including private use. This schedule assumes the same taxable-use percentage from that start date. A later conversion from wholly private use needs its own period-by-period calculation.

The first income year starts on the first-use date and ends at the income-year boundary. Later rows use the full income year. If you sell or stop holding the asset, enter its last day held. The schedule includes that day and stops there.

A disposal can also create assessable income or a deduction through a balancing adjustment. The download shows decline up to the entered final day. It does not calculate the separate adjustment from sale proceeds or termination value.

A Worked Asset Schedule

In this fictional example, a business buys equipment with a $12,000 tax cost and starts using it at the beginning of 2025-26. The entered effective life is five years and business use remains 80%.

For the first 365-day year, prime cost decline is $2,400. The deductible portion is $1,920 and the gross closing value is $9,600. Diminishing value decline is $4,800, producing a $3,840 deduction and a $7,200 closing value.

For the next 365-day year, diminishing value uses that $7,200 opening value. Its decline is $2,880, its deduction is $2,304 and its closing value is $4,320. Prime cost again gives a $1,920 deduction and closes at $7,200.

The default tool entries reproduce this schedule. Change the effective life to match the asset. The five-year example is an assumption, not an ATO classification of every equipment item. The effective-life guidance explains the ATO determination and self-assessment options.

Property and Vehicle Limits

For a business vehicle depreciation estimate, select Passenger car when the vehicle is designed mainly to carry passengers and the car cost limit applies. Enter its cost after recoverable GST, before the cap or business-use reduction. The calculator applies the acquisition income year’s limit first, then reduces each year’s deduction by your entered business use.

The ATO’s passenger vehicle guidance covers vehicles carrying less than one tonne and fewer than nine passengers, excluding motorcycles. The automatic cap supports acquisition years 2020-21 to 2026-27. It uses $69,674 for 2024-25 and 2025-26, and $69,883 for 2026-27. The ATO car thresholds distinguish the depreciation limit from the GST credit limit and luxury car tax thresholds.

Use the year you first hold the car, even if first use falls in a later income year. The limit stays with that car throughout this schedule. Joint ownership, special disability fit-outs and trade-in discount adjustments need separate assessment. The entered cost assumes sole ownership and excludes later additions.

For a fictional car acquired and first used at the start of 2025-26, enter $80,000 after GST credits, five years and 80% business use. Passenger car reduces the tax cost to $69,674. First-year prime cost decline is $13,934.80, with a deduction of $11,147.84 and a gross closing value of $55,739.20. The result card shows the deduction as $11,148.

If the accounts use the full $80,000 cost over five years with no residual value, a 365-day straight-line book charge is $16,000. The tax deduction is lower because the car cap reduces the tax cost and private use reduces the deduction. Accounting policies can also use a different life or residual value.

This is a single-asset tax depreciation calculator. A small business pool depreciation calculator uses pooling rules instead of these individual prime cost and diminishing value schedules. Assess simplified depreciation and any immediate deduction separately.

An investment property depreciation schedule separates eligible plant and equipment from capital works. The property’s purchase price alone cannot supply those values. This tool applies general asset formulas only to an entered eligible asset cost.

A quantity surveyor’s property schedule can identify eligible construction costs and separate asset values. Capital works have their own rules, and second-hand residential rental assets can have deduction restrictions. Assess those rules separately before using a plant-and-equipment amount here.

Download the CSV to retain annual deductions, gross closing values and eligible days under both methods. Each row also records entered cost, tax cost, the applied car limit and business use. It uses unrounded balances internally and rounds displayed rows to cents. Inputs and downloads stay on your device without uploads or browser storage.