Enter a dividend and its franking. You see the credit attached, the grossed-up amount the ATO taxes you on, and whether that credit comes back to you as a refund or still leaves tax to pay.
Enter valid values to calculate.
The company paid 30% tax on the profit, and you pay 15%. The credit is worth more than your tax on the dividend.
You are taxed on A$1,428.57, the credit covers all of it, and the A$214.29 left over is paid to you. A$1,000 of dividend ends up as A$1,214.29 in your pocket.
Here your rate is above the company rate, so the credit pays most of the tax and you top up the rest.
Tax on the A$1,428.57 grossed-up dividend is A$642.86. The credit leaves A$214.29 to pay, so you keep A$785.71.
The credit is A$700 × 30/70 = A$300. Add it to the cash dividend for A$1,000 of grossed-up income. At a selected 30% personal tax rate, the A$300 tax is covered by the credit, so you keep A$700.
Only A$420 is franked. Its credit is A$420 × 30/70 = A$180. The other A$280 carries no credit. Grossed-up income is A$880, giving A$264 tax at 30%. Subtract the A$180 credit and you pay A$84, keeping A$616.
An eligible Australian resident individual receives the fully franked A$700 dividend above and owes no income tax or Medicare levy. At a 0% rate the calculator gives A$300 refunded and A$1,000 kept. The credit is refundable even though the holder owes no tax. For the 60% franked dividend, the refund is A$180 and the holder keeps A$880.
These examples use the 30% company rate and leave the Medicare box unticked. The dividend statement supplies the actual franking amount and company rate.
An Australian company pays tax on its profit before it pays you a dividend. Franking passes that tax on to you as a credit, so the same profit is not taxed twice. You add the credit to the cash you received, pay tax on the total at your own rate, and the credit comes off that tax.
Franking credit = cash dividend × franking % × company rate ÷ (1 − company rate)
At 30%, every dollar of fully franked dividend carries about 43 cents of credit. At the 25% base rate entity rate it is about 33 cents.
Hold ordinary shares at risk for 45 continuous days, not counting the days you buy and sell, within the period that ends 45 days after they go ex-dividend. Preference shares need 90 days within a 90-day window. Buying just before the ex-dividend date and selling straight after does not earn the credit.
The small shareholder exemption covers you when your franking credits for the year come to A$5,000 or less and no related payment passes the dividend's benefit to someone else.
You report the cash dividend and the credit separately. The ATO adds them together as income and gives you the credit back as an offset, which is where a refund comes from.
Keep the cash dividend, franked and unfranked amounts, and attached credit from each dividend statement. AllInvestView keeps franking with each company dividend and the Australian filing pack totals the amounts for item 11 alongside your capital gains.
It is the company tax already paid on the profit behind a dividend. A company taxed at 30% that pays you A$70 fully franked attaches a A$30 credit, and you are treated as receiving A$100 of income with A$30 of tax already paid on it.
Yes, if you are an eligible Australian resident individual. When you owe no income tax or Medicare levy and have no other tax debt to offset, the whole credit can be refunded. A fully franked A$700 dividend at a 30% company rate carries A$300 of credit, so you keep A$1,000 including the refund.
Only the franked part carries a credit. A 60% franked A$700 dividend at a 30% company rate has A$420 franked, A$280 unfranked and A$180 of credit. Your taxable dividend income is A$880: the whole cash payment plus the credit.
A company franks at its tax rate for imputation, which is 25% for many smaller companies that qualify as base rate entities. A fully franked A$1,000 dividend carries A$333.33 of credit at 25%, or A$428.57 at 30%. Your statement shows the credit and the rate used.
To claim the credit you must hold ordinary shares at risk for 45 continuous days, not counting the days you buy and sell, within the period that ends 45 days after they go ex-dividend. Preference shares need 90 days. The small shareholder exemption covers you when your franking credits for the year come to A$5,000 or less and no related payment passes the dividend's benefit to someone else.
Item 11 of the individual return: unfranked amounts at 11S, franked amounts at 11T and franking credits at 11U. Check any prefilled figures against your dividend statements.
The grossed-up dividend is included in your taxable income, and franking credits can offset the Medicare levy. Tick the box if you pay the standard 2% levy; lower incomes pay less or none.
Track franking credits alongside the cash dividend from each Australian company you hold. AllInvestView keeps the cash and the franking credit together for every payment, then the Australian filing pack totals the year into 11S, 11T and 11U, next to your capital gains at item 18 and foreign dividends at item 20.
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AllInvestViewAustralian filing pack
Sources: ATO, resident tax rates, company tax rates and refund of franking credits. Rates are for Australian residents in the income year you pick. The calculator treats the dividend as the only income at your rate. Other tax you owe, or offsets you hold, change how much of the credit comes back in cash. This is an estimate, not tax advice.