Free small business calculator
Depreciation Rate Calculator
Calculate annual depreciation rate, annual depreciation expense, monthly depreciation, and depreciable base from asset cost, salvage value, and useful life.
Enter the minimum numbers needed to get a result.
Updated live as you type.
Planning estimate only. It does not include taxes, overhead allocation, depreciation, discounts, or other business-specific adjustments.
A depreciation rate is the percentage of an asset's depreciable cost allocated as expense each year. Under straight-line depreciation, the annual rate equals 1 divided by useful life.
Formula and example
Depreciation rate = 1 / Useful Life x 100; Annual depreciation = (Cost - Salvage) / Useful Life
A $10,000 asset with $1,000 salvage value and a 5-year life has a 20% annual depreciation rate and $1,800 annual depreciation expense.
Methodology & assumptions
Last updated: 2026-06-29Calculation method
Calculates the straight-line depreciation rate and expense. The rate is 1 divided by useful life; annual expense is depreciable base divided by useful life; monthly expense is annual expense divided by 12.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
Uses straight-line book depreciation only. Tax depreciation may use MACRS, Section 179, bonus depreciation, listed-property limits, or special conventions.
Input definitions
- Asset purchase cost: Original purchase cost of the asset.
- Salvage value: Estimated value at the end of useful life.
- Useful life: Expected service life in years.
Frequently asked questions
How do I calculate depreciation rate?+
For straight-line depreciation, divide 1 by useful life and multiply by 100. A 5-year asset has a 20% annual depreciation rate; a 10-year asset has a 10% annual rate.
How do I calculate annual depreciation expense?+
Subtract salvage value from asset cost to get depreciable base, then divide by useful life. For example, ($10,000 cost - $1,000 salvage) / 5 years = $1,800 per year.
Is depreciation rate based on cost or salvage value?+
The straight-line rate is based on useful life, but the dollar expense is based on depreciable base: cost minus salvage value. Salvage value reduces the amount you depreciate.
Is this depreciation rate used for taxes?+
Not necessarily. This calculator shows a straight-line book depreciation rate. US tax depreciation usually follows MACRS tables or special tax rules, which can differ from book depreciation.
Related guides
Go deeper with in-depth guides on the concepts behind this calculator.
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