Franking Credits Calculator
Calculate franking credit tax offset from Australian dividends
See how franking credits reduce your tax and understand the tax offset
Franking credits (also called imputation credits) are tax credits attached to dividends paid by Australian companies. When a company pays tax on its profits, it can pass these tax credits to shareholders.
If your marginal tax rate is below the corporate tax rate (30%), you may receive a refund for excess franking credits. If your tax rate is higher, you'll pay additional tax on the grossed-up dividend amount.
1. Grossed-Up Dividend
The dividend amount plus the franking credit equals your grossed-up dividend, which is included in your taxable income.
2. Tax Calculation
Tax is calculated on the grossed-up dividend amount at your marginal tax rate.
3. Franking Credit Offset
The franking credit is used as a tax offset, reducing your tax payable. If the credit exceeds your tax liability, you receive a refund.
If you receive a $700 fully franked dividend:
- Franking credit: $300 (30% of $1,000 grossed-up amount)
- Grossed-up dividend: $1,000 (included in taxable income)
- Tax at 32.5%: $325
- Less franking credit: -$300
- Tax payable: $25
- After-tax dividend: $675
Use our calculator to see how this works with your specific income and tax situation.