Franking Credits Calculator
Work out your franking credit, grossed-up dividend and net tax payable or refund on Australian share dividends. Enter your dividend amount, franking percentage and marginal tax rate to see the full picture instantly.
Your Dividend Details
The cash dividend amount shown on your statement
100% = fully franked, 0% = unfranked
The rate the paying company paid tax at
FY 2025-26 resident individual rates, incl. 2% Medicare Levy
Additional tax payable: $25.00
Based on your marginal tax rate vs. the company tax already paid
Because your marginal tax rate is higher than the company tax rate, the franking credit only partly covers the tax owed on the grossed-up dividend — you pay the difference.
Estimates for informational purposes only using the standard ATO franking credit formula. Does not account for the 45-day holding period rule, Div 7A, or other eligibility rules for claiming franking credits. Not tax advice — consult a registered tax agent for your situation.
What Are Franking Credits?
Franking credits, also known as imputation credits, are a feature unique to the Australian tax system that prevents company profits from being taxed twice — once at the company level and again when distributed to shareholders as dividends. When an Australian company pays tax on its profits and then distributes a "franked" dividend, it attaches a credit for the tax already paid. Shareholders declare the full grossed-up amount (cash dividend plus franking credit) as assessable income, then claim the franking credit as an offset against their own tax bill. If the franking credit is worth more than the tax owed, the excess is refunded in cash — making franking credits especially valuable to retirees, low-income earners and superannuation funds in pension phase.
The Franking Credit Formula
| Step | Formula | $700 fully franked example |
|---|---|---|
| Franking credit | Dividend × Franking% × (Company tax rate ÷ (1 − Company tax rate)) | $300 |
| Grossed-up dividend | Cash dividend + Franking credit | $1,000 |
| Tax offset | Franking credit reduces tax payable on grossed-up dividend | up to $300 |
Using the example above: a $700 fully franked dividend paid by a company at the 30% tax rate carries a $300 franking credit ($700 × (0.30 ÷ 0.70)). The grossed-up dividend of $1,000 is what appears as assessable income on your tax return, and the $300 franking credit is claimed as a tax offset against the tax payable on that $1,000.
Refund or Extra Tax — It Depends on Your Marginal Rate
Whether franking credits result in a refund or extra tax payable depends entirely on your own marginal tax rate compared with the company tax rate the dividend was franked at. If your marginal rate is below the company rate (for example someone on the tax-free threshold or the 18% bracket), the franking credit more than covers the tax owed and the ATO refunds the difference in cash. If your marginal rate is above the company rate (for example the 37% or 45% brackets, or 39%/47% including the Medicare Levy), the franking credit only partly offsets the tax owed and you pay the balance. This is why franking credits are especially prized by retirees and low-income investors, and why understanding your total tax position matters — try our income tax calculator to see your full marginal rate.
Fully Franked vs Partially Franked vs Unfranked
A fully franked dividend (100% franking) carries the maximum available franking credit, meaning the company has paid tax on the entire profit the dividend was paid from. A partially franked dividend (for example 50% franked) carries a proportionally smaller credit — often because the company earned some of its profit overseas or from sources not subject to Australian company tax. An unfranked dividend (0% franking) carries no credit at all, and the full cash amount is simply added to your assessable income with no offset. Most large ASX-listed companies such as the big four banks and major miners pay heavily franked dividends, while some growth companies and foreign-income-heavy businesses pay unfranked or lightly franked distributions. For a broader view of dividend sustainability, see our dividend payout ratio calculator.
Frequently Asked Questions
What are franking credits?+
Franking credits represent tax an Australian company has already paid on profits before distributing dividends. Shareholders include the grossed-up dividend (cash + credit) as income and claim the credit as a tax offset, avoiding double taxation.
How do I calculate a franking credit?+
Franking credit = dividend × franking% × (company tax rate ÷ (1 − company tax rate)). A $700 fully franked dividend at 30% company tax gives a $300 credit and a $1,000 grossed-up dividend.
What is a grossed-up dividend?+
The cash dividend plus the attached franking credit — it represents the pre-tax profit the dividend came from, and is the figure you declare as assessable income.
Can I get a refund of franking credits?+
Yes — if your marginal tax rate is below the company tax rate, the franking credit exceeds the tax owed and the ATO refunds the excess in cash.
What's the difference between 25% and 30% company tax for franking?+
Base rate entities (turnover under $50M, ≤80% passive income) pay 25% company tax; larger companies pay 30%. The franking credit uses whichever rate the paying company actually paid.