Work out the franking credit on a dividend, the grossed-up amount you declare, and whether you'll pay more tax or get a refund at 2026–27 rates.
Key facts
- A franking credit is the company tax already paid on a dividend: a fully franked $70 dividend from a company paying 30% tax carries a $30 credit.
- Franking credit = franked amount × company tax rate ÷ (1 − company tax rate). Companies pay 30%, or 25% if they're a base rate entity (turnover under $50 million).
- You include the dividend and the franking credit (the grossed-up amount) in your taxable income, then the credit comes off your tax.
- If your franking credits are more than your tax, the ATO refunds the difference to Australian residents.
- So the after-tax value of a fully franked dividend depends only on your marginal rate: no tax beyond the credit if your rate (with Medicare) is 30% or less.
$7,000 fully franked dividend by other income (2026–27)
| Other taxable income | Tax to pay (− refund) | Dividend after tax |
|---|---|---|
| $0 | $-3,000.00 | $10,000.00 |
| $18,200 | $-2,181.10 | $9,181.10 |
| $45,000 | $350.00 | $6,650.00 |
| $90,000 | $200.00 | $6,800.00 |
| $150,000 | $900.00 | $6,100.00 |
| $250,000 | $1,700.00 | $5,300.00 |
Company tax rate 30%, credit $3,000.00, grossed-up $10,000.00. Australian resident, income tax after the low income tax offset plus the Medicare levy; no Medicare levy surcharge or HECS-HELP.
Common questions
How do you calculate franking credits?
Multiply the franked amount by the company tax rate ÷ (1 − the rate). At 30%: dividend × 30/70, so $7,000 fully franked carries $3,000.00. At 25%: dividend × 25/75.
Do I get franking credits refunded?
Yes, if you're an Australian resident and your credits are more than your tax. With no other income, a $7,000 fully franked dividend means a refund of $3,000.00 in 2026–27.
Do I pay tax on franked dividends?
Only the difference between tax at your marginal rate on the grossed-up dividend and the credit. With $150,000 of other income, $7,000 fully franked means $900.00 more tax.
Is the franking credit taxable income?
Yes. You declare the grossed-up amount (dividend plus credit) as income and claim the credit as a tax offset.
See also the capital gains tax calculator and the income tax calculator.
Sources: ATO company tax rates and refund of franking credits. Checked 22 October 2026. General information, not tax advice.