Franking Credits & Dividend Tax
Work out how franking credits affect tax on your dividends. See an estimate of any extra tax to pay or refund you might receive.
How this tool works
Reviewed 6 September 2026. ATO Dividend Imputation System, corporate tax rates (30% standard / 25% base rate), and full cash refund provisions.
Calculation outline
- Calculates the 30% corporate tax gross-up: Franking Credit = Cash Dividend * Franking% * (30/70).
- Determines total assessable dividend income = Cash Dividend + Franking Credits.
- Applies entity-specific taxation: individual marginal tax rates (0%–47%), SMSF accumulation (15%), SMSF retirement pension (0%), and corporate entities (30%).
- Calculates net tax payable or ATO cash refund where franking credits exceed the entity gross tax liability.
- Evaluates grossed-up dividend yield and compares net after-tax income against cash fixed interest and term deposits.
Worked example
Example: A $7,000 fully franked dividend carries $3,000 in franking credits for a total assessable dividend of $10,000. In an SMSF retirement pension (0% tax), the fund owes $0 tax and receives a full $3,000 estimated refund from the ATO, keeping $10,000 total (a 42.8% boost over cash). For an individual in the 32% bracket, gross tax is $3,200, offset by $3,000 credits, leaving only $200 top-up tax payable.
Limits
- Assumes the investor meets the 45-day holding period rule (or qualifies for the small shareholder $5,000 exemption).
- Does not account for foreign tax offsets or unfranked foreign dividend income.
Sources
- ATO You and your shares - Franking credits and refunds
- Income Tax Assessment Act 1997 - Division 207 (Franked distributions)
This tool provides general information and illustrative estimates only. It does not consider your objectives, financial situation or needs and is not personal financial, tax or legal advice.