This calculator gives estimates only based on the information you input. It is for illustrative purposes only and is not tax advice. Thresholds, rates and eligibility change and may not apply to your circumstances. Confirm your position with your accountant or registered tax agent before acting on any figure shown.
This is general information only and does not take your circumstances into account.
The two methods and when each suits
Prime cost spreads the deduction evenly across the effective life. Diminishing value applies the rate to the reducing balance, so the deduction is larger early and smaller later. The total claimed over the full life is similar. What changes is when you get it.
A business with strong profit now often prefers diminishing value. A business expecting better years ahead may prefer the even spread. It is a tax position question, so it belongs with your accountant rather than with a slider.
Effective life is not a guess
The ATO publishes effective lives by asset type. You can either use the published figure or self assess based on how the asset will actually be used. The published figure is the safer starting point and it is what most businesses use.
Depreciation is not the loan repayment
These two get confused constantly. The repayment is cash leaving the business. Depreciation is a deduction against profit. They run on different timelines and different amounts. Only the interest portion of the repayment is generally deductible alongside the depreciation.
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