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Franking Credits Calculator

Calculate franking credits on dividends from Australian shares. See your grossed-up dividend, tax payable and refund (if applicable).

Updated 2025-26 FYData stays on your deviceATO sourced data

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

Frequently Asked Questions

What are franking credits?
Franking credits (imputation credits) represent tax already paid by Australian companies on their profits. When companies distribute dividends, shareholders receive a credit for this tax to avoid double taxation. Australia is one of the few countries with full dividend imputation.
Can I get a refund for franking credits?
Yes — if your total tax liability is less than your franking credits, the ATO refunds the difference. This benefits low-income earners, retirees, and SMSFs in pension phase. Note: Labor's 2019 proposal to abolish refundability was defeated and is not current policy.
What is the 45-day holding rule?
To claim franking credits, you generally need to hold the shares 'at risk' for at least 45 days (excluding ex-dividend day) for credits over $5,000 in a year. Small shareholder exemption applies if total franking credits are $5,000 or less. Designed to prevent dividend stripping.
What's the difference between fully franked and partially franked?
Fully franked = 100% of the dividend has Australian company tax already paid (you receive maximum credits). Partially franked = some portion has tax credits attached (e.g. 70% franked). Unfranked = no credits (often from foreign earnings or losses). The franking percentage determines your credit.

What is Franking Credits?

Franking credits (also called imputation credits) represent corporate tax already paid by Australian companies on the profits they distribute as dividends. Australia's dividend imputation system — one of few worldwide — credits shareholders for this tax to avoid double taxation.

How this calculator works

This calculator computes the franking credit using: dividend × (companyRate / (1 - companyRate)) × franking%. For a 30% rate company paying $700 fully franked, the credit is $700 × (30/70) × 100% = $300. Grossed-up dividend = $1,000. You're then taxed on $1,000 at your marginal rate (less Medicare), with the $300 credit offsetting the tax. If credits exceed your tax, you receive a refund (for individuals and SMSFs in pension phase).

Why Franking Credits Exist

Without dividend imputation, the same company profit would be taxed twice: 30% company tax, then your marginal rate on the dividend. Australia introduced full imputation in 1987 and refundability in 2000 (under Howard/Costello). It's now a key feature of Australian share investing — making fully franked Australian shares particularly attractive vs unfranked foreign dividends.

Who Benefits Most

Investors with marginal rates BELOW the company tax rate get a tax refund. Examples: SMSFs in pension phase (0% tax) get the full credit refunded; retirees on Age Pension (often 0% tax) get refunds; super funds in accumulation (15% tax) get partial refunds. High-income individuals (45% + 2% Medicare = 47%) still owe top-up tax but at a reduced effective rate.

The 45-Day Holding Rule

To claim franking credits over $5,000 in a year, you must hold the shares 'at risk' for at least 45 days (excluding ex-dividend day). 'At risk' means without significant hedging. Designed to prevent dividend stripping schemes. Small shareholder exemption: if total credits are ≤ $5,000 for the year, the rule doesn't apply.

Off-Market Buybacks Excluded

Since 2023, off-market share buybacks no longer carry franking credits (a Federal Government change to remove a tax loophole used primarily by large institutions). On-market buybacks are unaffected. Standard dividends from listed companies still carry full franking credits as before.

Base Rate Entity (25%)

Companies with aggregated turnover under $50M and ≤ 80% passive income qualify as Base Rate Entities and pay 25% company tax. Their franking credits are correspondingly smaller (25/75 ratio instead of 30/70). Most listed ASX companies are at the 30% rate, but check the dividend statement to confirm.

Worked Examples

Retiree (no tax): receives $1,400 fully franked dividend

Franking credit: $600. Total cash received: $2,000 ($1,400 dividend + $600 ATO refund)

  1. Cash dividend: $1,400
  2. Company tax rate: 30%
  3. Franking credit: $1,400 × (30/70) × 100% = $600
  4. Grossed-up dividend: $1,400 + $600 = $2,000
  5. Tax on $2,000 at 0% rate (retiree): $0
  6. Less franking credit offset: $600
  7. Net tax position: −$600 (refund)
  8. Total cash to retiree: $1,400 + $600 = $2,000

Updated for the 2025-26 financial year (1 July 2025 to 30 June 2026).

Official Sources

All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.

Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.

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