Free Australian asset depreciation calculator. Enter an asset's cost and effective life, choose the prime cost (straight-line) or diminishing value (200%) method, and see a full year-by-year depreciation schedule with opening values, annual deductions, and closing written-down values. Includes the latest ATO formulae and an instant asset write-off note for eligible small businesses.
The total cost of the depreciating asset.
Self-assessed or from the ATO effective life tables (TR 2024/3).
Both write off the same total — they differ in timing.
Instant asset write-off
Eligible small businesses (turnover under $10m) can immediately deduct the full cost of an asset costing less than the threshold, instead of depreciating it. The last confirmed threshold was $20,000 per asset (2024–25).
This threshold is set by legislation and has changed year to year. Confirm the current figure with the ATO before relying on it.
First-Year Deduction
$0.00
Depreciation Rate
20.0%
per year (1 ÷ life)
Total Depreciable
$0
Written off over its life
Enter an asset cost and effective life to see the year-by-year depreciation schedule.
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When your business buys a capital asset that lasts more than one year — tools, equipment, a vehicle, computers, machinery — you generally can't deduct the whole cost in the year you buy it. Instead you claim depreciation: a deduction for the asset's decline in value spread across its effective life. The ATO gives you two methods to choose from for each asset.
The prime cost method claims the same amount every year:
For example, a $10,000 asset with a 5-year effective life is depreciated at $10,000 × (1 ÷ 5) = $2,000 a year for five years, after which its value is nil.
The diminishing value method front-loads the deductions. For assets you started to hold on or after 10 May 2006 the rate is 200% of the prime cost rate:
Using the same $10,000 asset with a 5-year life, the rate is 200% ÷ 5 = 40%. Year 1 = $10,000 × 40% = $4,000; year 2 = remaining $6,000 × 40% = $2,400; year 3 = $3,600 × 40% = $1,440, and so on. The deductions get smaller each year and the written-down value approaches (but mathematically never quite reaches) zero.
Eligible small businesses (aggregated turnover under $10 million) can skip depreciation entirely for lower-cost assets and immediately deduct the full cost in the year the asset is first used or installed ready for use — as long as it costs less than the instant asset write-off threshold. The last confirmed threshold was $20,000 per asset for the 2024–25 income year. This threshold is set by legislation and has changed repeatedly over the years (it has been $1,000, $20,000, $25,000, $30,000, $150,000, and temporarily unlimited under temporary full expensing). Always confirm the current figure with the ATO before relying on it.
Both methods deduct the same total over time — the difference is timing. Diminishing value gives you bigger deductions sooner (useful when you want to reduce tax in profitable early years), while prime cost spreads the benefit evenly. You generally lock in the method when you first work out the asset's decline in value, so choose with your cash-flow and tax position in mind, and speak to a registered tax agent for advice on your specific situation.
Prime cost (straight-line) claims the same dollar amount each year over the asset's effective life — cost x (1 / 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 (200% / effective life). Both methods write off the same total cost over time; they just differ in timing. Prime cost suits assets that earn evenly; diminishing value brings deductions forward.
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. For example, an asset with a 5-year effective life has a rate of 200% / 5 = 40% per year, applied each year to the opening (written-down) value. Assets held before 10 May 2006 use the old 150% rate.
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 last confirmed threshold was $20,000 per asset for the 2024-25 income year. The threshold 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 always confirm the current figure with the ATO before relying on it.
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 the effective life or use the Commissioner of Taxation's determination published in the ATO's effective life tables (TR 2024/3). The effective life sets the depreciation rate: a longer life means a smaller deduction each year.
Choose prime cost when you want even, predictable deductions across the asset's life, or when the asset produces income steadily. Choose diminishing value when you want larger deductions sooner — useful for managing tax in profitable early years or for assets that lose value quickly. Once you choose a method for an asset you generally cannot switch it for that asset, so consider your cash-flow and tax position first.
Yes. Eligible small businesses can use simplified depreciation and allocate assets that cost more than the instant asset write-off threshold to a general small business pool, then depreciate the pool at 15% in the first year and 30% each year after. This calculator models the standard prime cost and diminishing value methods for a single asset; pooling is a separate election. Confirm eligibility and current rules with the ATO or your tax agent.
Sources & methodology
This calculator builds a year-by-year depreciation schedule using the two ATO methods for depreciating assets. Prime cost (straight-line) deducts cost x (1 / effective life) each year. Diminishing value deducts opening written-down value x (200% / effective life) each year — the 200% rate applies to assets first held on or after 10 May 2006. The instant asset write-off note reflects the last confirmed threshold; that figure is set by legislation and changes year to year. Everything is computed in your browser — nothing you enter is stored or sent to a server.
Authoritative sources
Reviewed by Bishal Shrestha — Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Last reviewed and updated: June 2026.
Disclaimer: This calculator produces estimates only and is not tax advice. Tax outcomes depend on your individual circumstances. For decisions that affect your tax position, consult a registered tax agent or the ATO directly.
OneBookPlus handles invoicing, GST tracking, BAS prep, and ATO lodgement automatically.