Straight-Line Depreciation Calculator
Straight line takes cost minus salvage value and splits it evenly across the useful life. A 12,000,000 machine with 2,000,000 of salvage over five years drops 2,000,000 a year, about 166,700 a month. After three years the book value is 12,000,000 less 6,000,000, so 6,000,000. The same amount comes off every year, which is why the line is straight.
Your numbers
Depreciation a year
2,000,000
Depreciation a month
166,667
Book value
6,000,000
Yearly depreciation
16.7%
Formula
Depreciation a year = (Purchase price − Salvage value) ÷ Years
Straight line is a bookkeeping convention; second-hand prices behave more like declining balance, losing a fixed share of what is left each year. For what it would actually sell for, use the resale-value or halving-rate pages — the real first-year fall is much steeper than this.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| Purchase priceWhat you actually paid, fees included, or the profit maths breaks. | 12,000,000 | 0 and up |
| Salvage valueWhat it is assumed to be worth at the end of its life; set zero to spread the whole cost. | 2,000,000 | 0 and up |
| Years (yr)How many years the money stays put; compounding bites harder as this grows. | 5 | 0 ~ 50 |
| Years elapsed (yr)Years since you bought it — the point you want the book value for. | 3 | 0 ~ 50 |
Step by step
Quick reference table
Results when only Purchase price changes and everything else stays put.
| Purchase price | Depreciation a year | Depreciation a month | Book value |
|---|---|---|---|
| 6,000,000 | 800,000 | 66,667 | 3,600,000 |
| 9,000,000 | 1,400,000 | 116,667 | 4,800,000 |
| 12,000,000 | 2,000,000 | 166,667 | 6,000,000 |
| 18,000,000 | 3,200,000 | 266,667 | 8,400,000 |
| 24,000,000 | 4,400,000 | 366,667 | 10,800,000 |
What each result means
| Result | At default values |
|---|---|
| Depreciation a yearThe amount written off each year; straight line makes it the same every year. | 2,000,000 |
| Depreciation a monthThe yearly figure over twelve, for monthly accounts. | 166,667 |
| Book valueWhat the books still carry it at; it never falls below salvage value. | 6,000,000 |
| Yearly depreciation (%)How much value falls each year, applied to what is left. | 16.7 |
Common mistakes
Straight line is a bookkeeping convention; second-hand prices behave more like declining balance, losing a fixed share of what is left each year. For what it would actually sell for, use the resale-value or halving-rate pages — the real first-year fall is much steeper than this.
Glossary
- Purchase price
- What you actually paid, fees included, or the profit maths breaks.
- Salvage value
- What it is assumed to be worth at the end of its life; set zero to spread the whole cost.
- Years
- How many years the money stays put; compounding bites harder as this grows.
- Years elapsed
- Years since you bought it — the point you want the book value for.
- Depreciation a year
- The amount written off each year; straight line makes it the same every year.
- Depreciation a month
- The yearly figure over twelve, for monthly accounts.
- Book value
- What the books still carry it at; it never falls below salvage value.
- Yearly depreciation
- How much value falls each year, applied to what is left.
Frequently asked questions
Q. How is Straight-Line Depreciation Calculator calculated?
Depreciation a year = (Purchase price − Salvage value) ÷ Years — Straight line takes cost minus salvage value and splits it evenly across the useful life. A 12,000,000 machine with 2,000,000 of salvage over five years drops 2,000,000 a year, about 166,700 a month. After three years the book value is 12,000,000 less 6,000,000, so 6,000,000. The same amount comes off every year, which is why the line is straight.
Q. Can you walk through an example?
With Purchase price 12,000,000, Salvage value 2,000,000, Years 5yr, Years elapsed 3yr, the answer is Depreciation a year 2,000,000.
Q. What do I need to enter?
Enter Purchase price, Salvage value, Years, Years elapsed. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Purchase price moves the answer to Purchase price 6,000,000 → Depreciation a year 800,000 and Purchase price 24,000,000 → Depreciation a year 4,400,000. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
Straight line is a bookkeeping convention; second-hand prices behave more like declining balance, losing a fixed share of what is left each year. For what it would actually sell for, use the resale-value or halving-rate pages — the real first-year fall is much steeper than this.
Related calculators
Tax rates and interest conventions differ by country and product — check your contract for real transactions.