Franking credits calculator
Gross up a franked dividend, work out the tax on it, and see whether the credits leave you with a refund.
Covers 2026–27 income year · rates as at 2026-07-01
Extra tax on the dividend
Estimate$350.00
an effective 33.5% on the grossed-up amount
- Franking credit
- $3,000.00
- Grossed-up dividend
- $10,000
- Tax on the dividend
- $3,350.00
| Cash dividend | $7,000.00 |
|---|---|
| Franking credit | $3,000.00 |
| Grossed-up dividend | $10,000 |
| Tax | -$3,350.00 |
| Payable | -$350.00 |
A $7,000 fully franked dividend carries $3,000 of credits, so the grossed-up amount is $10,000 — the figure your tax is actually calculated on.
How this is calculated
How this is calculated
The credit is 30/70, not 30%
The company already paid 30% on the profit, so the credit restores what was withheld: dividend × 30 ÷ 70. On $7,000 fully franked that is $3,000, and the grossed-up dividend is $10,000.
credit = franked dividend × rate ÷ (1 − rate)Tax is charged on the grossed-up amount
The full $10,000 is added to your taxable income, then the $3,000 credit is applied against the tax. At a 32% marginal rate the tax is $3,200, so $200 is payable.
Excess credits are refunded in cash
Below about a 30% effective rate the credit exceeds the tax and the ATO pays the difference. That refundability is unusual — most imputation systems only let credits offset tax owing.
Worked example: $7,000 fully franked on a $45,000 income
| Dividend | $7,000 |
|---|---|
| Franked | 100% |
| Other income | $45,000 |
| Franking credit | $3,000 |
|---|---|
| Grossed up | $10,000 |
| Refund | credits exceed the tax |
The same dividend for someone on $200,000 produces a bill rather than a refund — the credit is fixed at $3,000 while the tax rises with the marginal rate.
What this assumes
- Shares were held at risk for 45 days.
- All dividends are from Australian companies.
- No foreign income tax offsets apply.
- Full-year Australian tax resident.
Where this commonly goes wrong
- The 45-day holding rule requires shares held at risk for 45 days excluding the buy and sell days, unless total credits are under $5,000.
- Partly franked dividends are common outside the big banks and miners, and a 70% franked dividend carries only 70% of the credit.
- Credits from a base rate entity attach at 25%, not 30%, so the same cash dividend from a small company grosses up less.
Questions
How do franking credits work?
The company has already paid 30% tax on the profit behind the dividend. The credit restores that amount to your income and is then applied against your tax, so the profit is taxed once at your rate rather than twice.
How much is the credit on a fully franked dividend?
Thirty seventieths of the cash amount at the 30% company rate — $3,000 on a $7,000 dividend. It is not 30% of the dividend, which would be $2,100, and that difference trips up most manual calculations.
Will I get a refund?
If your effective rate on the grossed-up dividend is below the company rate that generated the credit. Someone on $45,000 typically receives cash back; someone on $200,000 pays additional tax on the same dividend.
What is the 45-day rule?
Shares must be held at risk for at least 45 days, not counting the days you buy and sell, before you can claim the credits. It does not apply if your total credits for the year are under $5,000.
Do credits apply inside super?
Yes, and they are especially valuable there. A fund taxed at 15% receives credits generated at 30%, so fully franked dividends often produce a refund to the fund rather than a tax bill.
Are foreign dividends franked?
No. Franking only attaches to dividends from Australian companies that have paid Australian tax. Foreign dividends may carry withholding tax instead, which is handled as a foreign income tax offset.
Related tools
Sources
General estimate based on published ATO rates for the 2026–27 income year. Not tax advice, and it does not consider your objectives, financial situation or needs. Confirm your position with the ATO or a registered tax agent.
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