Tax Depreciation Calculator
Project a first-year and five-year depreciation schedule for a work or business asset using the ATO's prime cost or diminishing value method, pro-rated.
Your results
Calculation breakdown
- Prime cost
- $10,000.00 × (365/365) × (1/5) × 100% use = $2,000.00
| Year | Opening value | Depreciation | Closing value |
|---|---|---|---|
| 1 | $10,000.00 | $2,000.00 | $8,000.00 |
| 2 | $8,000.00 | $2,000.00 | $6,000.00 |
| 3 | $6,000.00 | $2,000.00 | $4,000.00 |
| 4 | $4,000.00 | $2,000.00 | $2,000.00 |
| 5 | $2,000.00 | $2,000.00 | $0.00 |
Assumptions
- Depreciation methods: Assets acquired from 10 May 2006 · Source: Australian Taxation Office · Last verified 2026-07-01
- The 5-year schedule assumes a full 365-day year after the first year and no method change.
- Low-value pooling and instant asset write-off concessions are not modelled here.
How this calculator works
When you buy an asset for work or business use that has an effective life of more than a year, the ATO generally requires you to claim its cost over time as decline in value rather than all at once. The prime cost method spreads the cost evenly, applying a flat 100% divided by the asset's effective life each year to its original cost, giving a consistent annual deduction. The diminishing value method instead applies 200% divided by the effective life to the asset's opening adjustable value each year, which front-loads larger deductions early and shrinks over time as the value declines. This calculator computes the first-year deduction (pro-rated for the number of days you held and used the asset in that first year) and projects a five-year schedule under your chosen method, then applies your business or work-use percentage to reflect any private use of the asset.
Rates sourced from the Australian Taxation Office for the 2026–27 financial year. Last reviewed 01/07/2026.
Frequently asked questions
Which depreciation method gives a bigger deduction sooner?
The diminishing value method generally produces larger deductions in the earlier years because it applies a higher rate to a shrinking balance, while the prime cost method spreads the same total deduction evenly across the asset's effective life.
Can I switch methods partway through an asset's life?
Generally no — once you choose a depreciation method for an asset, you continue with that method for the life of the asset. Choose carefully based on how quickly you want the deduction recognised.
What if I only use the asset partly for work?
You can only claim the work or business-use percentage of the calculated depreciation, so an asset used 60% for work would only allow 60% of the prime cost or diminishing value deduction to be claimed each year.
Rates and thresholds are configured for the 2026–27 Australian financial year and should be reviewed when government settings change.