How to use the depreciation calculator
- 1 Enter the cost of the asset.
- 2 Enter its effective life in years, from the ATO effective life tables.
- 3 Enter the days held in the first year and your work use.
- 4 Choose a method and read the yearly deductions.
Worked example
A $3,000 laptop with an effective life of four years, used 100% for work all year. Under diminishing value the rate is 50%, so the first year deduction is $1,500, then $750 and $375. Under prime cost it would be $750 each year for four years.
Small items, pools and write-offs
- $300 or less: employees and investors can claim the full cost immediately for items used mainly to earn non-business income.
- Low-value pool: items under $1,000 can go into a pool depreciated at 18.75% in the first year and 37.5% after.
- Small business: businesses with turnover under $10 million may be able to write off eligible assets immediately under the instant asset write-off; check the current threshold.
- Effective life comes from the ATO's tables, or you can make your own estimate.
Working from home? Add equipment to your claim with the Work From Home Deduction Calculator. Investment property? Include depreciation in the Negative Gearing Calculator.
Features
Diminishing value
200% divided by effective life, applied to the reducing value.
Prime cost
100% divided by effective life, applied to cost.
Part-year
First year apportioned by days held.
Work use
Only the work share is deductible.
When to use it
Laptops and phones
Claim work equipment over several years. Add equipment to the Work From Home Deduction Calculator.
Office furniture
Desks and chairs for a home office. Rental property? See the Negative Gearing Calculator.
Tools
Trade tools costing over $300. Business assets go in the Sole Trader Tax Calculator.
Business assets
Plan deductions for equipment. Work car? See the Car Expenses Deduction Calculator.
Related Tax tasks
Frequently asked questions
What is decline in value?
The ATO term for depreciation. It lets you deduct the cost of an asset over its effective life rather than all at once.
What is the diminishing value method?
Each year you deduct a percentage of the asset's remaining value, using a rate of 200% divided by its effective life. Deductions are higher in early years.
What is the prime cost method?
You deduct the same percentage of the original cost each year, using 100% divided by the effective life, so deductions are even.
Where do I find effective life?
In the ATO's effective life determination, or you can work out your own estimate.
Can I claim items under $300 in full?
Yes. Individuals earning non-business income can claim items costing $300 or less in full if mainly used for that income.
What is a low-value pool?
Assets with a value under $1,000 can be pooled and depreciated at 18.75% in the first year and 37.5% after.
What about the instant asset write-off?
Eligible small businesses may be able to deduct the full cost of assets under a threshold set by the government each year. Check the current rules.
Do I apportion for private use?
Yes. Only the work or business use percentage can be claimed.
Can I change methods?
Generally you cannot change the method once chosen for an asset.
What if I sell the asset?
A balancing adjustment applies, comparing the sale price with the asset's written-down value.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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