Franking Credits Calculator

What a franking credit is

Australian companies pay tax on their profits before paying dividends. Under the dividend imputation system, the tax the company paid is passed on to shareholders as a franking credit attached to the dividend, so the same profit is not taxed twice. You include both the cash dividend and the franking credit in your assessable income (the "grossed-up" dividend), pay tax on that at your own rate, and then get the franking credit back as a tax offset.

If your tax rate is lower than the company rate, the offset is more than the tax on the dividend. Individuals and complying super funds get the excess refunded in cash; companies cannot, but can convert it to a tax loss. A dividend can be fully franked (100%), partly franked or unfranked; your dividend statement shows the franked amount, the unfranked amount and the franking credit.

How to calculate a franking credit

Franking credit = franked dividend × company tax rate ÷ (1 − company tax rate). At the 30% rate that most listed companies pay, the multiplier is 0.3 ÷ 0.7 = 0.4286 (3/7). So a $700 fully franked dividend carries a $300 credit and grosses up to $1,000. The ATO calls this the maximum franking credit: $42,857.14 on a $100,000 distribution.

Smaller companies that are base rate entities (aggregated turnover under $50,000,000 and no more than 80% passive income) pay 25% and frank at that rate: the multiplier is 0.25 ÷ 0.75 = 1/3, so $750 carries $250. For imputation the company uses the rate worked out on the previous year's turnover and passive income, which is why a company's franking rate can differ from the rate it pays this year.

For a partly franked dividend, apply the formula to the franked part only. A $1,000 dividend franked at 50% has $500 franked, a $214.29 credit, and grosses up to $1,214.29.

Tax on a $700 fully franked dividend at different incomes (2026–27)

The grossed-up $1,000 is added to your other taxable income. Tax and Medicare levy on it, less the $300 credit, gives your net position:

Refund of excess franking credits

A retiree with no other income who receives $14,000 of fully franked dividends declares $20,000. The tax and Medicare on that is $0, so $6,000 of the $6,000 credit is refunded. If you do not otherwise need to lodge a tax return, you can claim it with the ATO's Application for refund of franking credits for individuals (online, by phone or by post) if your dividends total no more than $18,200. Otherwise claim it in your return.

Super funds pay 15% on investment income in accumulation phase, so a $7,000 fully franked dividend ($10,000 grossed up) gives a $1,500 refund or tax reduction. In retirement (pension) phase the fund pays 0%, and the whole $3,000 credit is refunded.

Partly franked dividend: worked example

Jo earns $90,000 and receives a $1,000 dividend that is 50% franked at 30%. The franked half carries a $214.29 credit, so Jo declares $1,214.29. At a 32% marginal rate (including Medicare) the tax on that is $388.57; after the credit Jo pays $174.29 more tax and keeps $825.71 of the $1,000. The unfranked half is taxed in full because no company tax was paid on it, often because the profit came from overseas or from tax concessions.

Reporting franked dividends in your tax return

• Your dividend statement shows three figures: the unfranked amount, the franked amount and the franking credit. Each goes in its own label at the dividends question of your return; myTax pre-fills them from share registries once they report.
• Dividends from managed funds and ETFs come through the trust distribution statement instead, with franking credits passed through to you.
• Keep dividend statements for 5 years. Reinvested dividends also form the cost base of the new shares for capital gains tax.
• The Medicare levy is charged on taxable income including the grossed-up amount, and the franking offset can reduce the levy as well as income tax. Low income earners keep the low income tax offset; it applies to the whole taxable income.

Rules that can cost you the franking credit

• Holding period rule: you must hold shares "at risk" for at least 45 days (90 for preference shares), not counting the days you buy and sell, to claim the offset.
• Small shareholder exemption: individuals whose total franking credits for the year are $5,000 or less are exempt from the holding period rule. Above that, credits on a parcel that fails the rule are lost entirely.
• Non-residents: franked dividends are exempt from dividend withholding tax, but the credit is not refunded or used as an offset. Unfranked dividends are withheld at 30%, usually 15% under a tax treaty, and that is a final tax.
• Dividend reinvestment plans: reinvested dividends are still taxable and still carry franking credits.