100% = fully franked
Salary, wages, or other income (excluding dividends)
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Cash Dividend
$150,000.00
Franking Credit
$50,000.00
Personal Tax
$27,100.00
Effective Rate
38.6%
Net to Shareholder
$122,900.00
Profit Breakdown
Everything you need to know about dividend imputation in Australia
What are Franking Credits?
Franking credits (imputation credits) represent company tax already paid on profits distributed as dividends. Australia's dividend imputation system prevents double taxation by allowing shareholders to offset their personal tax with franking credits attached to dividends.
How Franking Credits Work
When you receive a franked dividend, you include the grossed-up amount (dividend + franking credit) in your tax return. You pay tax on the grossed-up amount at your marginal rate, plus the 2% Medicare levy, then receive a tax offset equal to the franking credit. If the credit is more than your tax, the ATO refunds the difference.
The credit depends on the tax rate of the company paying the dividend. A full credit is the dividend × rate ÷ (1 − rate): 30 ÷ 70 of the dividend for a 30% company (most ASX-listed shares), or 25 ÷ 75 for a 25% base rate entity.
Fully vs Partially Franked
A fully franked dividend (100%) has the maximum franking credits attached. Partially franked dividends have a lower franking percentage, meaning less tax has been paid at the company level. Unfranked dividends carry no credits.
Low Income Earners
If your marginal tax rate is below the company tax rate, the franking credits will exceed your tax on the dividend, resulting in a tax refund. This is particularly beneficial for retirees and low-income shareholders.
ATO-Aligned: This calculator uses official ATO tax rates and franking credit rules for the 2026-27 financial year. Consider consulting a tax professional for complex dividend structures.
Disclaimer: This calculator provides estimates based on current ATO rates and thresholds for the 2026–27 financial year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax agent before making financial decisions. Read our terms
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