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How much does the ATO owe you on that franked dividend?

Australian dividend imputation lets investors reclaim the corporate tax already paid on their behalf. Plug in your dividend, franking percentage and tax rate to see your exact credit and refund.

Updated · Jun 2026·Source: ATO · 2025–26 rates·Read · 5 min

Your inputs

A$

The cash amount shown on your dividend statement.

100%

Most Australian large-cap dividends are 100% franked. Check your dividend statement.

Your marginal tax rate · 2025–26

Inputs local. Nothing sent anywhere.

The result

Additional tax payable

$29

You owe the ATO more after accounting for the franking credits received

Cash dividend
$1,000
Franking credit
$429
Grossed-up income
$1,429
After-tax income
$971

How we calculated it

Cash dividend received$1,000
+ Franking credit (100% franked)+ $429
= Grossed-up dividend$1,429
− Tax at 32% marginal rate− $457
− Cash dividend already received− $1,000
= Extra tax to pay− $29

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How Australian dividend imputation works

Australia's dividend imputation system — introduced in 1987 and made fully refundable in 2000 — is one of the most shareholder-friendly tax regimes in the world. It eliminates the double taxation of corporate profits: once when the company pays tax, and again when shareholders receive dividends.

When an Australian company earns $1,000 of profit and pays 30% corporate tax, it keeps $700 to distribute as a fully franked dividend. Attached to that $700 cash payment is a $300 franking credit — a voucher representing the tax already paid. The ATO then treats the shareholder as if they received the full $1,000 pre-tax, and taxes them at their own marginal rate, crediting the $300 already paid.

If your marginal rate is below 30%, you pay less tax on the income than the credit covers — and the ATO refunds the difference in cash. If your rate is above 30%, you pay the gap. The mathematics creates a powerful incentive for low-income investors (including retirees and super funds) to hold Australian shares.

The formula in practice: Franking credit = Cash dividend × (corporate rate ÷ (1 − corporate rate)). At 30%: credit = cash × 3/7. A $7,000 fully franked dividend carries a $3,000 credit, for a $10,000 grossed-up income on your tax return.

Franking credits in superannuation — the big advantage

Superannuation funds in accumulation phase pay 15% tax on investment income. Because this is half the standard 30% corporate rate, a super fund always generates a net refund on every fully franked dividend received — the fund paid 15% tax but the company already prepaid 30% on its behalf.

A self-managed super fund (SMSF) in pension phase pays 0% tax on investment income. Every dollar of franking credits is refunded in cash — making fully franked Australian shares effectively worth 43% more per dollar of pre-tax profit compared with an unfranked dividend from the same company. ($700 cash + $300 refund = $1,000 versus $700 cash.)

This explains why Australian equities — particularly the major banks, Telstra, and the big miners — make up a disproportionate share of SMSF portfolios. Critics argue this biases retirement savings toward domestic shares at the expense of international diversification; proponents note it reflects a genuine economic advantage that should be preserved.

Base-rate entities (companies with aggregated turnover under $50 million) pay 25% corporate tax rather than 30%. Their dividends carry smaller franking credits — a $750 fully franked base-rate dividend carries a $250 credit (750 × 25/75). Our calculator defaults to 30% but you can model 25% by adjusting inputs if your shares come from a smaller company.

§ Letters & replies

Franking credits, answered.

Common questions about Australian dividend imputation and tax refunds.

What are franking credits?+ open

Franking credits (also called imputation credits) represent the tax an Australian company already paid on its profits before distributing a dividend. When you receive a franked dividend, the ATO lets you offset those pre-paid corporate taxes against your own income tax bill — and refunds the difference if the credits exceed your liability.

How is the franking credit calculated?+ open

For a fully franked dividend, the credit = cash dividend × (corporate rate ÷ (1 − corporate rate)). At the standard 30% corporate rate that works out to cash dividend × 3/7. So a $700 fully franked dividend carries a $300 franking credit, giving a $1,000 grossed-up dividend.

Can I get a cash refund for franking credits?+ open

Yes. Since 2000 Australia allows 'refundable' imputation credits. If your franking credits exceed your total income tax liability, the ATO sends you the difference as a cash refund — even if you paid no income tax at all. This is especially valuable for retirees on low or zero income.

What is a fully franked dividend?+ open

A fully franked (100%) dividend means the company paid corporate tax (currently 30%) on the full amount of profit distributed. A partially franked dividend means only some of the profit bore corporate tax — common when a company has overseas earnings that were taxed abroad rather than in Australia.

What marginal rate should I use?+ open

Use your top marginal rate including the 2% Medicare levy. For 2025–26: 18% ($18,201–$45,000), 32% ($45,001–$135,000), 39% ($135,001–$190,000), 47% (over $190,000). If you are a self-managed super fund in accumulation phase, use 15%; in pension phase, 0%.

Are franking credits relevant for super funds?+ open

Very. A super fund in accumulation phase pays 15% tax on investment income, well below the corporate rate of 30% — so it always generates a net refund on fully franked dividends. In pension phase the fund pays 0% tax, so the entire franking credit is refunded. This makes Australian franked shares especially attractive inside superannuation.

What is the 45-day rule?+ open

To claim franking credits you must hold the shares 'at risk' for at least 45 days (90 for preference shares) around the ex-dividend date. Short-term traders who hold shares for less than 45 days around the dividend cannot claim the credits. The $5,000 small shareholder exemption removes this rule for individuals with total franking credit claims under $5,000.

Do I need to declare franking credits in my tax return?+ open

Yes. You declare the grossed-up dividend (cash + credit) as assessable income, then claim the franking credit as a tax offset. Your share registry (e.g. Computershare, Link) and the ATO's pre-fill service will show the amounts on your annual tax statement.

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