Franking credits explained: what they are and how much you get back
A fully franked A$700 dividend counts as A$1,000 at tax time. On nil tax you get A$300 back; on the top rate you pay A$150 more. How franking works at every tax rate, partly franked dividends, the 45-day rule, and a calculator.
Your dividend statement says A$700. The ATO treats it as A$1,000. The A$300 in between is a franking credit, and depending on your tax rate it becomes a refund, covers your tax, or covers part of it.
What a franking credit is
Before an Australian company pays you a dividend, it has usually already paid 30% tax on the profit. A franking credit passes that tax on to you, so the same profit isn't taxed twice.
A fully franked A$700 dividend comes from A$1,000 of profit. The company paid A$300 in tax and handed you the rest. You declare the full A$1,000, then the A$300 counts as tax you've already paid.
The formula: cash dividend × 30 ÷ 70 × the franked percentage = your franking credit.
How much you get back
Since 2000, any credit left over after your tax is refunded in cash. So what the credit is worth depends entirely on your marginal rate.
Show the numbers
| Value | Taxable income | |
|---|---|---|
| Nil | A$300 | Up to A$18,200 |
| 15% | A$150 | A$18,201 to A$45,000 |
| 30% | A$0 | A$45,001 to A$135,000 |
| 37% | −A$70 | A$135,001 to A$190,000 |
| 45% | −A$150 | Over A$190,000 |
- Nil tax: the whole A$300 comes back. You keep A$1,000.
- 15%: A$150 comes back.
- 30%: the credit exactly covers your tax. You keep the A$700 cash.
- 37% and 45%: you pay an extra A$70 or A$150.
Franking helps at every rate. Here's the same A$700 with and without it.
Show the numbers
| Fully franked | Unfranked | |
|---|---|---|
| Nil | A$1,000 | A$700 |
| 15% | A$850 | A$595 |
| 30% | A$700 | A$490 |
| 37% | A$630 | A$441 |
| 45% | A$550 | A$385 |
Franking credit calculator
- Cash dividend
- A$700.00
- Franking credit
- A$300.00
- Goes in your tax return
- A$1,000.00
- Tax at your rate
- A$300.00
- Refunded or offset
- A$0.00
- You keep
- A$700.00
Partly franked dividends
Not every dividend is fully franked. A company can only frank up to the Australian tax it has paid, so miners with overseas profits or companies carrying losses often frank part of a dividend or none of it.
At 50% franked, A$700 carries A$150 of credit instead of A$300. That gap shows up in the yield too.
Show the numbers
| Value | |
|---|---|
| 100% franked | 5.71% |
| 70% franked | 5.20% |
| 50% franked | 4.86% |
| 0% franked | 4.00% |
Two companies quoting a 4% yield can be worth 5.71% and 4.00% to you. Franking can also drop with no change to the cash, because a company can run out of franking credits.
Smaller companies (the ATO calls them base rate entities) pay 25% tax, so they frank at that rate. A fully franked A$700 from one of them carries A$233.33, and the calculator above handles both.
Four rules that catch people out
- The 45-day rule. To claim the credit, you generally need to hold the shares for at least 45 days, not counting the days you buy and sell. It's 90 days for preference shares. If your total franking credits for the year are under A$5,000, the rule doesn't apply to you. It's one reason buying just before the ex-dividend date doesn't work.
- The refund comes later. It arrives through your tax return, not with the dividend. If you don't need to lodge a return, you can still apply to the ATO for the refund.
- Super funds get it too. A fund in accumulation phase pays 15%, the same as the 15% row above. A fund paying a pension pays no tax on those earnings and gets the full credit back. That matters for SMSF pension payments.
- Foreign shares have none. A US dividend carries no franking, and its withholding tax works differently. A 4% US yield isn't a 4% franked one.
Where to find your franking percentage
Two places. The company's dividend announcement states the franked percentage, along with the amount and the dates. Your share registry's dividend statement shows the franking credit in dollars. ETFs pass on the franking from the shares they hold, and list it on their annual tax statement.
If you've never opened a dividend announcement, here's what each field means.
Quick questions
Are franking credits refundable?
Yes, for Australian residents who meet the holding rules. Any credit left after your tax bill is paid back in cash when you lodge.
How do I calculate a franking credit?
Multiply the cash dividend by 30, divide by 70, then multiply by the franked percentage. A$700 fully franked gives A$300. Or use the calculator above.
Do non-residents get franking credits?
Not as a refund. The franked part of a dividend paid to a non-resident is generally free of Australian withholding tax, but the credit itself can't be claimed back.
Where Dividend Guardian fits
Franking starts with the cash, and the cash is what Dividend Guardian tracks. Paste your holdings, even one share, and in about thirty seconds you see what they pay over a year, which months it lands in, and which of your bills it already covers. No account and no broker login.
Subscribers get every payment recorded per share. When a company confirms a change to its dividend, you get a note with its own announcement attached, which is the document that states the franking.
Know what your dividends pay before tax time
Start free. Type what you own, one holding per line, and see a year of dividend income and the months it arrives in.
For $6 AUD a month or $60 AUD a year, Guardian keeps watching: every payment recorded per share, your income by company and by sector, and a note when a company confirms a change to what it pays. There's a 30 day money-back guarantee.
Build my Dividend PaycheckDividend Guardian provides general information and estimates, not personal financial or tax advice, and nothing here is a recommendation to buy, hold or sell anything. Figures use 2026–27 resident tax rates before the Medicare levy and assume the franking credit can be used in full; the holding rules, your other income and your circumstances can change the result. The ATO or a registered tax agent can confirm your position. Guardian reports confirmed changes; it does not predict them.