Depreciation Calculator
A depreciation claim spreads the cost of a business asset across the years you use it. Choose diminishing value or straight line, then enter the cost and the rate from the general depreciation rates guide, IR265, March 2026. The table shows that method for 10 years once those figures are in.
Diminishing Value and Straight Line
Inland Revenue uses two methods, and the total you can claim over the life of the asset is the same for both. Diminishing value takes a percentage of the adjusted tax value each year, so the deduction falls. Straight line takes the same percentage of the original cost each year until that cost is used up. You do not have to use one method for every asset, and you can change at the end of a year by starting from the adjusted tax value.
The diminishing value steps start with cost times the rate. The straight line steps use the same cost times the straight line rate, then repeat that dollar amount. A cafe example on the diminishing value page is a commercial espresso machine at $10,000 with a 30% rate: year one is $3,000, and the adjusted tax value becomes $7,000. A computer terminal example on the straight line page is $1,200 at 21%: $252 each year until the last year, which is only the amount still left.
Cost times the rate. Diminishing value uses the adjusted tax value after year one. Straight line keeps using the original cost, or the 80% base if Investment Boost applies.
Multiply by the months you used the asset, then divide by 12. A part month counts as a whole month. A full year skips this step.
Multiply by the business use percentage. At 100% business use, the claim is the figure from the earlier steps.
Rates in IR265
Inland Revenue sets the rate from the estimated useful life of that kind of asset. The March 2026 IR265 guide is the list for assets other than buildings acquired on or after 1 April 2005, and for buildings acquired on or after 19 May 2005. Look in your industry category first. If the asset is not there, use the asset category. Copy the rate for the method you picked, then type that percentage into the tool.
| Asset in IR265 March 2026 | Diminishing value | Straight line |
|---|---|---|
| Laptop, personal computer, or the computer equipment default class | 50% | 40% |
| Tablet, smartphone, or similar device, from the 2013/14 income year | 67% | 67% |
| Printer | 40% | 30% |
| Coffee maker in a hotel, motel, restaurant, cafe, tavern, or takeaway | 30% | 21% |
| Loose furniture, or the office furniture default class | 16% | 10.5% |
| Motor vehicle for people, up to 12 seats | 30% | 21% |
| Class NA light goods vehicle, gross vehicle mass up to 3.5 tonnes | 20% | 13.5% |
A public calculator that uses one computer percentage for every device will miss this split. IR265 puts laptops and personal computers at 50% diminishing value and 40% straight line. Tablets and smartphones sit on the 67% line. A market resale curve for a car is also a different sum from the tax rate. The ordinary motor vehicle line above is 30% diminishing value and 21% straight line, and IR265 notes a residual value estimate of 25% in how that rate was set. You still apply the published percentage. You do not subtract a salvage guess and then divide by years. Motor vehicles used for short term hire of one month or less are a different IR265 line, at 50% diminishing value and 40% straight line. For an ordinary car, type 30 if you picked diminishing value, or 21 if you picked straight line.
Assets bought on or after 21 May 2010 do not get the old 20% loading on the rate. If nothing in IR265 fits, Inland Revenue lets you apply for a provisional rate. The claim cannot go past the cost. In the IR265 dishwasher example, straight line at 13.5% on $1,200 is $162 a year for seven years, and year eight is the remaining $66.
Months and Business Use
The first year is often a part year. Inland Revenue counts each month or part month the asset is used or available for use. The espresso machine bought on 20 May, with a 1 April to 31 March year, is 11 months. $3,000 times 11 divided by 12 is $2,750. Personal use comes off after that. At 70% business use the claim is $1,925.
For a vehicle, self employed people and partners apportion private kilometres. IR260 says a logbook kept for at least three months can set the percentage for three years if business use does not change by more than 20%. A company car that is already in fringe benefit tax is different: you do not cut the depreciation again for that private use, because fringe benefit tax is the adjustment. The FBT calculator is that other clock. Kilometre rates are a third path. They already include depreciation, so you do not claim a second depreciation deduction for the same vehicle. That rule sits on the home office and vehicle expenses page.
Low Value Assets up to $1,000
From 17 March 2021, an asset costing up to $1,000 can be deducted in the year you acquire or create it, instead of spreading the cost. The September 2026 depreciation guide, IR260, says the cost is GST exclusive if you are GST registered, and GST inclusive if you are not. Two tests still apply. The asset must not be bought from the same supplier at the same time as other assets that use the same depreciation rate. It must not become part of another depreciable asset, such as materials that build a factory wall.
The $1,000 test is the cost when you acquire the asset. A later adjusted tax value under $1,000 does not become a fresh write off. You keep using the rate until the cost is written off, or you stop using the asset. If you sell a low value asset you fully deducted, IR260 says the entire sale proceeds are income in the year you sell. If you start using it mainly for private purposes, the market value at that change is income.
Investment Boost
From 22 May 2025, a business can deduct 20% of the cost of a new asset, or an asset new to New Zealand, then depreciate the other 80% in the normal way. The asset must be depreciable, and it must first be available for use on or after that date. Second hand assets sourced in New Zealand do not qualify. Most fixed life intangible assets, such as patents, do not qualify. There is no dollar cap. If you claim the boost you must depreciate the asset. You cannot elect it to be non depreciable.
Inland Revenue’s Investment Boost examples show a new deep fryer at $2,500: the 20% deduction is $500, and depreciation is then worked on the remaining $2,000 as if that were the full cost. A taxi car at $45,000 used half for business claims half of the 20%, which is $4,500, and depreciation is then worked on $36,000. The 20% is not cut for a short first year in those examples. Months still cut the ordinary depreciation. A used asset from overseas can qualify if it is new to New Zealand. A second hand asset sourced in New Zealand does not. A single demonstration while an asset is held for sale, such as one lawnmower demo, is not treated as use. If you use an IR10, the boost goes in boxes 28 and 52, and the asset value goes in Box 60. A $10,000 asset bought on 23 May 2025 is a $2,000 boost.
GST in the Asset Cost
Enter the cost Inland Revenue uses for depreciation, not the sticker if GST sits on top of it. If you are registered for GST, depreciate the price less the GST charged. If you are not registered, depreciate the total price, including GST. The same GST exclusive test applies to the $1,000 low value line and to the $5,000 pooling maximum.
That GST claim, when you are registered, is a different return from this income tax deduction. A taxable supply of the asset is handled on the GST return. The depreciation figure is what reduces taxable income on the IR3 or the company return. A profit estimate that still needs income tax sits on the self employed tax calculator.
Buildings at a Nil Rate
The claiming depreciation page says the same return to 0% from the 2025 income year, after a temporary period when non residential buildings could be depreciated. Residential buildings stay outside that deduction. Land, trading stock, franchise fees, and intangible assets such as goodwill are not depreciated. A new commercial or industrial building can still be eligible for the 20% Investment Boost even though the ongoing building rate is nil. Improvements to depreciable property can qualify too, but not improvements to a residential building.
A Pool of Assets
Pooling treats a group of lower value assets as one asset. IR260 says you must use diminishing value, you must use the lowest rate in the pool, and buildings cannot be pooled. Each asset in the pool must be wholly used in the business, or subject to fringe benefit tax. The maximum pooling value is $5,000 for each asset from the 2015/16 income year. For a GST registered person that maximum excludes GST. Once an asset is in the pool it stays there, unless private use later forces it out. The pool depreciation uses the average pool value, not a simple cost times rate on day one. This calculator is for one asset, not a pool average.
Sale or Private Use
When you sell a depreciated asset for more than its adjusted tax value, the extra is income. IR260 says a loss on sale is deductible for depreciable assets other than buildings, and a gain on sale has to be recognised. The same guide says you may not claim depreciation in the year you dispose of an asset, unless it is a building. If you stop using a low value asset in the business and start using it privately, the market value at that change is income. If you never claim the deduction and you do not elect the asset out, the adjusted tax value still falls by the amount calculated. Keep the fixed asset register IR265 describes: description, cost, dates, method, private use percentage, and the adjusted tax value each year. Records are kept for at least seven years.
Wellington Cafe, Inland Revenue’s Machine
Inland Revenue’s labelled diminishing value example is the commercial espresso machine at $10,000, rate 30%, bought on 20 May, used 70% for business. The claim is $1,925. In the tool, choose Diminishing value, then enter cost 10000, rate 30, 11 months, and 70. Leave Investment Boost off unless the machine is new or new to New Zealand and first available on or after 22 May 2025. The year one figure should show $1,925.
How to Read the Result
The year one figure and the 10 year table stay hidden until you type a cost and a rate. Choose Diminishing value and the rate comes off the adjusted tax value after year one, so the deduction falls. Choose Straight line and the same percentage of the original cost repeats each year, or of the 80% base if Investment Boost applies, until that cost is used up. Later years assume 12 months and the same business use, and they assume you have not sold the asset. The value left is the adjusted tax value after the full calculated depreciation, not only the business use share. IR260 works a private use car that way: the book value falls by 100% of the depreciation, and only the business share is the deduction. A claim cannot exceed the value still left. If the cost is $1,000 or less and Investment Boost is off, year one is a full deduction and the later years are nil, and only if the same supplier test and the not part of another asset test are met. Ticking Investment Boost on that cost uses the 20% plus depreciation of the other 80%. It does not stack the 20% on a full write off.
This is a working paper for the method and the rate you type. It is not an Inland Revenue assessment. Copy the percentage from IR265 or from the rate finder.