Asset Depreciation Calculator Australia

Prime cost (straight-line) claims the same dollar amount each year over the asset's effective life: cost x (days held / 365) x (100% / effective life). Diminishing value claims more in the early years and less later, because each year's deduction is the asset's remaining (written-down) value x (days held / 365) x (200% / effective life). Prime cost writes the asset down to nil by the end of its effective life. Diminishing value never quite reaches nil, so it ends with a disposal or with a transfer to a low-value pool rather than with a final row.

No. Both ATO formulae carry a days-held term, and days held is counted in the income year the asset was first used or installed ready for use, then divided by 365. An asset first used on 1 June is held for 30 days of that income year, so a $10,000 asset with a five-year effective life deducts $10,000 x (30 / 365) x 20% = $164.38 in that year, not $2,000. The part you could not claim in the first year is picked up at the far end: under prime cost the schedule runs one income year past the effective life for the remainder.

If you are registered for GST and entitled to claim the credit, enter the cost excluding GST, because you recover the GST as an input tax credit rather than depreciating it. The ATO writes the cost that way in its own worked examples. If you are not registered, or the credit is not available to you, use the cost you actually paid including GST. The same basis decides the instant asset write-off: a $21,780 purchase is $19,800 excluding GST, which is under a $20,000 threshold even though the price on the invoice is over it. The cost also includes what you spent transporting the asset, installing it and getting it ready to use.

For assets you started to hold on or after 10 May 2006, the diminishing value rate is 200% divided by the asset's effective life in years. An asset with a 5-year effective life has a rate of 200% / 5 = 40% a year, applied to the opening (written-down) value each year and apportioned by days held in the first year. Assets you started to hold before 10 May 2006 use a 150% rate instead, which this calculator does not model.

Because each year takes a fixed proportion of what is left, and a proportion of a positive number is always less than that number. At a 40% rate the asset still carries about 8% of its cost after ten years. Nothing in the depreciation rules lets you deduct the remaining balance in a year you pick, so a schedule that dumps the tail into a final row is showing you a deduction that does not exist. Two things actually end it: a balancing adjustment when you dispose of the asset, and a transfer to a low-value pool once the balance falls under $1,000.

Yes. If a car costs more than the car limit in the income year you start to hold it, its cost is reduced to that limit before you work out the decline in value, so a $95,000 vehicle is depreciated on the limit rather than on $95,000. Cars here means passenger vehicles designed to carry under one tonne and fewer than nine passengers, so a one-tonne ute or a van above that load capacity is generally outside it. The limit is indexed each year against the motor vehicle part of the consumer price index, and it also caps the GST credit at one eleventh of the limit. Tick the car option above and this calculator applies the limit for the income year of first use.

A balancing adjustment event happens, and it is worked out by comparing what you get for the asset (its termination value) with its adjustable value, which is the written-down value in the last column of the schedule above. Get more than the written-down value and the difference is assessable income; get less, or scrap it for nothing, and the difference is a deduction. That is why a written-down value is worth carrying forward accurately rather than treating the schedule as finished at the end of the effective life. This calculator works out the written-down value and stops there: it does not model the disposal itself.

Effective life is how long a depreciating asset can be used to produce income, taking into account expected wear and tear. You can either self-assess it or adopt the Commissioner of Taxation's published determination, which will not be challenged in an audit. That determination is no longer a Taxation Ruling: Taxation Ruling TR 2022/1 was withdrawn on 31 October 2025 and the tables now sit in the Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025, registered 15 September 2025, which replaced the 2015 determination. Verified on the Federal Register of Legislation on 31 August 2026.

The instant asset write-off lets eligible small businesses (aggregated turnover under $10 million) immediately deduct the full cost of an asset in the year it is first used or installed ready for use, instead of depreciating it over several years, provided the asset costs less than the threshold. The threshold is $20,000 per asset for the 2026-27 income year, and the same for 2024-25 and 2025-26, checked on 31 August 2026. From 1 July 2026 it is permanent rather than extended a year at a time. It is set by legislation and has changed many times (it has been $1,000, $20,000, $25,000, $30,000, $150,000 and temporarily unlimited under full expensing), so confirm the figure for your income year with the ATO before relying on it. We do not put a number on any year we have not checked.

Yes, and there are two different pools. Eligible small businesses using simplified depreciation allocate assets costing at or above the instant asset write-off threshold to a general small business pool, deducted at 15% in the first year and 30% each year after. Separately, any taxpayer using diminishing value can move an asset into a low-value pool once its written-down value falls under $1,000, deducted at 18.75% in the year it goes in and 37.5% a year after that. An asset you have been depreciating under prime cost cannot be moved into a low-value pool. This calculator models a single asset under the standard methods, not either pool.

Usually one of five reasons, none of which mean either figure is wrong. The deduction is reduced for any private or non-taxable use of the asset, which this page does not ask about. A different effective life, self-assessed instead of adopted from the Commissioner, changes every row. The instant asset write-off or a small business pool may have been used instead of a standard schedule. A car limit, a second-hand asset rule or an associate rule may apply to the cost. And a leap income year holds 366 days while the formula still divides by 365, which this page caps at a full year rather than letting a year claim more than the annual amount. Your registered tax agent has your full asset register and the return; this is a working estimate.