Get the charge, the schedule and the entry in one step
Enter the asset cost, the salvage value and the useful life, and the calculator returns the annual and monthly charge, a year-by-year schedule, and the journal entry ready to copy. A second mode works out Saudi tax depreciation under Article 17 of the Income Tax Law, which is a different figure from the book one.
Depreciating a fixed asset looks like simple arithmetic: a cost spread across some years. In practice it is two numbers, not one. One goes into your books and your financial statements; the other goes into the tax return under entirely different rules. Confusing the two is among the most common fixed-asset mistakes in Saudi businesses.
This depreciation calculator works out both. In accounting mode you pick the method and get the year's charge, a year-by-year schedule and the journal entry ready to copy. In tax mode you pick the asset group and the calculator applies the Article 17 rate to the group balance, with the 50% rule and the SAR 1,000 floor.
What is a depreciation calculator?
A free tool that works out the depreciation charge on a fixed asset and shows its effect on the carrying amount across the asset's useful life. It runs live with no submit button, recalculating on every change to any field. It covers four accounting methods: straight line, double declining balance, sum of years digits and units of production. Alongside the annual charge it shows the monthly charge, the depreciable base and the net book value after a year, then the full schedule and the journal entry at the monthly amount.
The four depreciation methods
The depreciable base is the same in all four: the asset cost less the salvage value. What differs is how that base is spread across the years:
| Method | Formula | When to use it |
|---|---|---|
| Straight line | Depreciable base ÷ useful life | An asset whose benefit is consumed evenly across the years, and the most widely used method |
| Double declining | Opening book value × (2 ÷ useful life) | An asset whose benefit is concentrated in its early years, such as computers and equipment |
| Sum of years digits | Base × (remaining years ÷ sum of the years' digits) | Acceleration that is gentler than double declining |
| Units of production | (Base ÷ total expected units) × units this year | An asset consumed by use rather than by time, such as machinery |
Under the declining methods the charge never takes the carrying amount below the salvage value, so the final charge is limited to whatever difference remains. The calculator applies that limit automatically, which settles the total of the charges at the depreciable base instead of overshooting it. Straight line and sum of years digits reach the salvage value by the arithmetic itself, and under units of production it depends on the units actually produced.
Qoyod computes straight-line depreciation only in its fixed-assets module. The other three methods are shown here for calculation and comparison, and need manual treatment in your books.
Accounting depreciation versus Saudi tax depreciation
Article 17 of the Saudi Income Tax Law governs the depreciation of fixed assets for tax purposes, and its rules differ from the accounting treatment in three fundamental ways. First, the rate is set by statute rather than by management's estimate. Second, it applies to the balance of a whole group of assets on a declining basis, not to each asset separately. Third, a newly acquired asset enters at half its cost in its first year.
| Group | What it covers | Rate |
|---|---|---|
| Group 1 | Fixed buildings | 5% |
| Group 2 | Movable industrial and agricultural buildings | 10% |
| Group 3 | Plants, machinery, hardware, software and equipment, including passenger and cargo vehicles | 25% |
| Group 4 | Geological survey, drilling and exploration expenses | 20% |
| Group 5 | All other tangible and intangible assets, such as furniture, aircraft, ships and goodwill | 10% |
Rules in the same article that are easy to miss:
- Land is excluded: Article 17 keeps land out of tax depreciation altogether.
- The 50% rule: an asset put into service is added at half its cost in the current year and the other half in the next, and disposal compensation is deducted on the same basis.
- Disposal excess: where half the disposal compensation exceeds the group balance, the group drops to zero and the excess is added to taxable income.
- The SAR 1,000 floor: once the group's closing balance falls below SAR 1,000, the remainder may be deducted in full.
- The 4% repairs cap: repair and improvement costs are deductible up to 4% of the group's closing balance, and anything above that is added to the balance and depreciated with it, under Article 18.
The Article 17 mode always works in Saudi riyals, because the SAR 1,000 floor is set by statute and relabelling it in another currency would state a rule that does not exist. Qoyod does not compute tax depreciation; it is prepared at return time from the fixed-asset register.
The depreciation journal entry
The entry debits depreciation expense and credits accumulated depreciation for the amount of the charge. Accumulated depreciation is a contra account presented on the balance sheet as a deduction from the asset's cost, so the historical cost stays visible in the accounts and the difference between them is reported as the net book value. The entry is posted at each month end at the monthly charge, which is the figure the calculator shows in the journal entry card.
Why use the Qoyod depreciation calculator
- A full schedule, not a single number: opening book value, charge, accumulated depreciation and closing book value for every year, so you see what the method does across the asset's whole life.
- An entry ready to copy: both sides of the entry at the monthly charge, with a copy button, so it goes straight into your books.
- The tax figure beside the book figure: a separate mode applying the Article 17 rates, the 50% rule and the SAR 1,000 floor, so you know the gap before you prepare the return.
- The salvage floor: the declining methods never take the carrying amount below the salvage value, which is the most common error when the declining charge is worked out by hand.
- Six currencies: pick yours and every amount and its decimal places follow, and the calculator labels what you enter without converting between currencies.
Related tools
Read the accounting detail in what is depreciation and the straight-line depreciation definition, and generate your other entries with the journal entry generator. To track your assets, their depreciation and their reports inside the system, see the fixed-asset register and reports and fixed-asset tracking and disposal, or start from the Qoyod accounting software.
Have a few questions?
Direct answers to what accountants and business owners ask about depreciating fixed assets.
How is straight-line depreciation calculated?
Subtract the salvage value from the asset cost, then divide by the number of years in the useful life. An asset costing 100,000 with a 10,000 salvage value over five years has a depreciable base of 90,000, an annual charge of 18,000 and a monthly charge of 1,500. This is the one method Qoyod computes automatically in its fixed-assets module.
What is the difference between accounting and tax depreciation?
Accounting depreciation spreads the cost of an asset over its useful life in your books, and you estimate both the life and the method. Tax depreciation is governed by Article 17 of the Saudi Income Tax Law: five groups each with a fixed rate, applied to the whole group balance on a declining basis rather than to a single asset. The two figures normally differ, and the book number does not go into the tax return as it stands.
What is the depreciation journal entry?
The entry debits depreciation expense and credits accumulated depreciation for the amount of the charge. Accumulated depreciation is a contra account shown on the balance sheet as a deduction from the asset's cost, so the asset stays at its historical cost and the difference between them is the net book value. The entry is usually posted at each month end.
Does land depreciate?
No. Land is not depreciated for accounting purposes because its useful life is indefinite, and Article 17 excludes it from tax depreciation explicitly. Where land and a building are bought together, the price is allocated reasonably between them and only the structure is depreciated.
What is the 50% rule in tax depreciation?
Article 17 adds an asset put into service to the group balance at half its cost in the current year, with the other half following in the next year. The same applies to compensation for assets disposed of, which is deducted at 50% across those two years. That is why a newly bought asset is not depreciated on its full value in year one.
Is this calculator officially certified?
No. It is a free guidance tool that applies the standard accounting methods and the text of Article 17. The official reference for tax depreciation is the Income Tax Law, its implementing regulations and the Zakat, Tax and Customs Authority; the accounting reference is the standards your business applies and management's estimate of the useful life.