Depreciation Calculator
Bought a computer, a vehicle or equipment for the business? You don't book the cost as an expense all at once — it's spread across the years of use. This calculator shows how much depreciation you can book in the report year, how much has already accumulated, and the net book value left on the books — including the pro-rated first year, which is where manual calculations usually go wrong.
Asset details
The default is the customary useful life for the asset type. Change it if the Tax Authority set a different rate for you.
The first and last years are pro-rated by actual months in service, not a full year — the usual mistake in a manual calculation.
An estimate only. Depreciation rates are set in Income Tax regulations and vary by asset type and industry, with accelerated rates occasionally granted by temporary order. Confirm the rate with an accountant before filing.
How it works
- •Straight-line depreciation. Cost minus residual value, divided by useful life in years. This is the standard method for most assets in a small business.
- •Partial years are counted in months. An asset bought in July earns roughly half a year's depreciation in year one, not a full year. The same applies to the final year.
- •Net book value isn't market value. It's what remains on the books after accumulated depreciation. When you sell, the difference between the proceeds and this figure is a capital gain or loss.
- •Depreciation doesn't depend on financing. Took a loan or a lease? Depreciation is computed on the asset's cost; the monthly repayment is an entirely separate story.
Frequently asked questions
What's the depreciation rate for a computer in Israel?
Three years is customary for computers and electronics — about a third of the cost each year. The Tax Authority sets depreciation rates by asset type in regulations, and certain equipment categories or industries carry different rates.
How is depreciation calculated in the year of purchase?
By the number of months the asset was actually in service. Equipment bought on October 1 earns three months of depreciation that year — a quarter of the annual amount — not a full year. This is the most common mistake in a manual calculation.
What is residual value?
The value you expect the asset to retain at the end of its useful life. Depreciation is computed on cost minus residual value, because you don't expect to lose that part. For most small-business equipment, a residual of zero is assumed.
What happens when I sell an asset that isn't fully depreciated?
You compare the proceeds to the net book value. Higher proceeds create a taxable capital gain; lower proceeds create a loss. That's why tracking net book value matters, not just the annual charge.
Can I expense the full cost of equipment in one year?
Usually not — an asset serving the business over time is depreciated across its useful life. Exceptions exist for low-cost items and for periods when accelerated depreciation was granted by temporary order. Check with an accountant what applies to your tax year.
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