Dividend Tax Calculator — Australia 2026-27
Understand the tax implications of your dividend income.
Estimate Australian dividend tax with franking credits, marginal tax rate, Medicare levy context, cash dividends, and refund or top-up outcomes.
Australia Dividend Tax Notes
Australian dividend tax is shaped by franked versus unfranked income, gross-up amounts, franking credits, Medicare levy settings, and your marginal tax rate.
This version keeps ATO-style refund or top-up language specific to Australian investors.
Australian version note: this dividend tax keeps the calculation anchored to AUD amounts, local product names, Australian tax language, and the way banks, employers, agencies, or advisers usually describe the inputs.
Local cues stay visible where they matter: ATO, PAYG, superannuation, Medicare levy, stamp duty, kilometres, comparison rate, APRA, Centrelink, GST, and Australian-dollar results are not rewritten into overseas vocabulary.
Use the output as an Australian estimate first, then sanity-check it against local quotes, lender criteria, government thresholds, state rules, or professional advice before relying on the number.
Uses 30% corporate tax rate (large companies). Small business (25%) available in Detailed mode.
If your marginal tax rate is below 30%, you receive a cash refund from the ATO for excess franking credits. This is one of the key advantages of the Australian imputation system.
Anyone whose tax on the grossed-up dividend is less than the franking credit. This includes: retirees below the tax-free threshold, low-income earners (under ~$45,000), SMSFs in pension phase (0% tax rate), and students with small investment income.
An SMSF in pension phase pays 0% tax. Every dollar of franking credit is refunded by the ATO. A $10,000 fully franked dividend (30% rate) generates $4,286 in franking credits — all refunded. This is why dividend-paying blue chip shares are popular in SMSFs.
The franking credit appears on your dividend statement. Include it in your tax return (myTax pre-fills this from your broker). After lodging, the ATO processes the refund — typically 2–4 weeks. You must lodge a return even if otherwise not required, to receive the refund.
SMSFs have two phases with different tax treatment. The choice of phase dramatically affects dividend tax outcomes.
SMSF pays 15% tax on investment income. A $10,000 grossed-up dividend (from $7,000 cash + $3,000 credit): tax = $1,500. Minus $3,000 franking credit = $1,500 refund. The franking credit exceeds the 15% tax, so fully franked dividends generate a net refund for SMSFs even in accumulation phase.
Once an SMSF moves to pension phase (paying retirement income), the tax rate on investment earnings drops to 0%. Every cent of franking credit is refunded. This makes fully franked AU shares extremely tax-efficient for retirees drawing a pension from an SMSF.
Switch to Advanced mode, tick “SMSF / trust”, and enter 0% (pension phase) or 15% (accumulation). The calculator shows the refund amount automatically. Use this to compare the after-tax yield of franked vs unfranked income in your fund.
Foreign share dividends receive no Australian franking credits. The tax treatment depends on the country and whether withholding tax applies.
US dividends are typically subject to 15% US withholding tax (under the Australia-US tax treaty). You declare the full dividend as income in Australia and receive a foreign income tax offset (FITO) for the 15% withheld. Net Australian tax depends on your marginal rate minus the offset.
Tax treatment varies by country and treaty. UK and many EU countries have 15% withholding under treaties. Some countries (France, Germany) may withhold more. Foreign income tax offsets are available for tax paid overseas up to your Australian marginal rate on that income.
ETFs holding US shares (e.g. VGS, IVV) distribute income as unfranked distributions with a foreign income tax offset component. The ETF tax statement shows the breakdown. Effective tax is typically lower than your full marginal rate due to the FITO, but no refunds are available.
Step-by-step: how Australian dividend imputation is calculated
The three-step process
Step 1: Gross up. Add the franking credit to the cash dividend (credit = cash × corp rate / (1 − corp rate)). Step 2: Include the grossed-up dividend in your assessable income and calculate tax at your marginal rate. Step 3: Subtract the franking credit from the tax owed. If the credit exceeds the tax, the ATO refunds the difference.
| Example | Calculation |
|---|---|
| $7,000 cash · 100% franked · 30% | Credit: $3,000 · Gross: $10,000 · Tax: $3,000 · Net: $0 → Effective rate: 0% on cash received |
| $7,000 cash · 100% franked · 15% | Credit: $3,000 · Gross: $10,000 · Tax: $1,500 · Net: −$1,500 → $1,500 refund from ATO |
| $7,000 cash · 0% franked · 30% | No credit · Tax: $2,100 · Effective rate: 30% → Full marginal rate applies; no offset |
Net tax on a $10,000 fully franked dividend at each marginal rate
Franking credit on $10,000 fully franked cash dividend (30% corporate rate): $10,000 × 30/70 = $4,286. Grossed-up dividend = $14,286.
| Your marginal rate | Tax on grossed-up · Net after credit · Effective rate |
|---|---|
| 0% (below threshold) | $0 tax · $4,286 refund · Receive bonus cash → ATO pays you the full $4,286 franking credit as a refund |
| 15% (under $45k) | $2,143 tax · $2,143 refund → Still a net refund; imputation benefit is largest here |
| 30% ($45k–$135k) | $4,286 tax · $0 net · nil effective → Most common scenario; franking exactly offsets the tax |
| 37% ($135k–$190k) | $5,286 tax · $1,000 extra tax · ~10% effective |
| 45% ($190k+) | $6,429 tax · $2,143 extra tax · ~21.4% effective |
How franking credits work for SMSFs and retirement income
SMSF accumulation phase: 15% tax
An SMSF in accumulation phase pays 15% tax on investment income. On a $10,000 fully franked dividend: grossed-up = $14,286, tax at 15% = $2,143. Franking credit = $4,286. Net = $4,286 − $2,143 = $2,143 refund. Even in accumulation, SMSFs receive a net refund on fully franked dividends.
SMSF pension phase: 0% tax
In pension phase, tax on investment earnings drops to 0%. Every franking credit is fully refunded. The same $10,000 dividend generates a $4,286 cash refund with no tax. This is one of the most powerful tax advantages in the Australian superannuation system. Shares with high franking become very attractive as SMSF assets.
| SMSF phase | Tax on $10k fully franked dividend |
|---|---|
| Accumulation (15%) | $2,143 tax · $4,286 credit · $2,143 refund |
| Pension (0%) | $0 tax · $4,286 credit · $4,286 refund |
How franking credits differ for small business entity (SBE) dividends
Small business entity rate: 25%
Companies with aggregated turnover under $50 million are taxed at 25%, not 30%. This means the franking credit per dollar of dividend is smaller. On a $10,000 fully franked dividend from a small company: credit = $10,000 × 25/75 = $3,333 (not $4,286). Grossed-up = $13,333.
| Scenario | Franking credit on $10k cash dividend |
|---|---|
| Large company (30% rate) | $4,286 (30/70 × $10,000) → Larger credit; more beneficial for high-rate taxpayers |
| Small company (25% rate) | $3,333 (25/75 × $10,000) → Smaller credit; still provides significant tax benefit |
Check which rate applies: the dividend statement from your company or broker will show the franking credit per share, which implicitly tells you the rate applied. Use Detailed mode in this calculator to select 25% for small company dividends.
❓ Frequently askedFrequently asked questions
What are franking credits in Australia?
Franking credits (imputation credits) represent corporate tax already paid by an Australian company at 30% (or 25% for small businesses) on its profits. When the company pays a dividend, it passes a credit to shareholders for the tax already paid. Shareholders use this credit to offset personal income tax, preventing double taxation of company profits.
Can I get a tax refund from franking credits?
Yes. If your marginal tax rate on the grossed-up dividend is less than the franking credit, the ATO pays you the difference as a cash refund. This commonly applies to retirees below the tax-free threshold, low-income earners, and SMSFs in pension phase (0% tax). You must lodge a tax return to claim the refund even if you would not otherwise need to.
What is the difference between fully franked and unfranked dividends?
A fully franked dividend (100% franked) carries a full franking credit equal to 30/70 of the cash dividend for large companies. An unfranked dividend (0% franked) has no credit — the full amount is taxed at your marginal rate. Partially franked dividends carry proportional credits. Check your dividend statement or the company’s ASX announcement for the franking percentage.
How do franking credits work for SMSF members?
An SMSF in accumulation phase pays 15% tax, so it receives a net refund on fully franked dividends (since the 30% credit exceeds the 15% tax). In pension phase the SMSF pays 0% tax — every cent of franking credit is refunded. This makes high-franking blue chip Australian shares particularly valuable for SMSFs generating retirement income.
Do small company dividends have different franking credits?
Yes. Small Business Entities (SBEs) with aggregated turnover under $50 million pay 25% company tax, not 30%. This means franking credits are calculated at 25/75 per dollar of dividend (not 30/70). The credit is smaller, but the dividend still benefits from imputation. Use Detailed mode to switch between 30% and 25% corporate rates.