Franking Credit Calculator

Last updated: May 2026

What is a franking credit?

A franking credit (also called an imputation credit) is a tax credit Australian companies attach to dividends to reflect company tax already paid on the underlying profits. The system prevents the same dollar of profit being taxed twice: once at the company level (30%, or 25% for base-rate entities) and again at the shareholder level.

When you receive a fully franked dividend, the company has already paid 30 cents of tax on every dollar of pre-tax profit. As the shareholder you receive 70 cents in cash plus a franking credit worth 30 cents that you can use against your own tax bill.

How franking credits are calculated

The formula has two parts. First, work out the franking credit attached to the dividend, then add it to the cash dividend to gross it up to its pre-tax equivalent:

Franking credit = Cash dividend x (company tax rate / (1 - company tax rate)) x (franking %)
Grossed-up dividend = Cash dividend + Franking credit

For example, a 50% franked $1,000 dividend at the 30% company tax rate gives a franking credit of $1,000 x (0.30 / 0.70) x 0.50 = $214.29, and a grossed-up dividend of $1,000 + $214.29 = $1,214.29.

For a fully franked dividend at the standard 30% company tax rate, that simplifies to:

Franking credit = Cash dividend x (30 / 70)

You then declare the grossed-up amount as taxable income, calculate tax at your marginal rate, and subtract the franking credit from the tax payable. If the credit exceeds your tax bill, the ATO refunds the difference in cash.

When franking credits give you a refund

Franking credits are fully refundable for most Australian-resident individuals and superannuation funds. That means:

• A retiree in pension phase (0% tax) receives the full franking credit as a cash refund.
• A super fund in accumulation phase (15% tax) receives a refund on the portion of the credit above 15%.
• A high-income earner on the 45% marginal rate (47% with Medicare levy) owes additional tax on the grossed-up amount.

The 45-day holding rule

To claim franking credits on listed shares or ETFs, you generally must hold the security at risk for at least 45 days (excluding purchase and sale day) around the ex-dividend date. The rule does not apply if your total franking credits across the year are under $5,000 (the “small shareholder exemption”).

Franking credits and ETFs

Australian-equity ETFs such as VAS, A200, MVW and VHY pass franking credits through to unit holders in their distribution statements (look for the franked amount and franking credit lines on the AMIT Member Annual Statement). The grossed-up yield on these ETFs is often 0.5-1.5 percentage points higher than the cash-distribution yield, which matters when comparing them with un-franked alternatives. See VAS vs A200 and VHY vs MVW for franking-adjusted return comparisons.

Worked example: $1,000 fully franked dividend

The franking credit attached is $1,000 x 30/70 = $428.57. Grossed-up assessable income is $1,428.57. After-tax outcome at each marginal rate (2025-26, including 2% Medicare levy where applicable):

Not financial advice. Try the calculator above with your own figures.

Frequently asked questions

How much franking credit do I get on a $1,000 fully franked dividend?

In this illustrative example, a $1,000 fully franked dividend carries a franking credit of $428.57, assuming a 30% company tax rate. Your assessable income is $1,428.57 and you can offset $428.57 against your tax bill (or claim it as a refund).

Are franking credits refundable in Australia?

Yes. For Australian-resident individuals, complying super funds and most charities, franking credits are fully refundable if they exceed your tax liability. The ATO pays the excess in cash after you lodge your tax return.

How do franking credits work in superannuation?

A super fund in accumulation phase pays 15% tax on earnings, so a 30% franking credit produces a 15% net refund. A fund in pension phase (0% tax) receives the full franking credit back as cash. This is why Australian-equity allocations are often weighted higher inside super.

Which ASX ETFs pay franked dividends?

Australian-equity ETFs typically pass through high franking levels. Examples include VAS, A200, MVW, VHY and IOZ. Franking levels generally sit between 70% and 100% depending on the holdings in each fund.

What is the 45-day holding rule?

To claim franking credits on listed shares or ETFs above a small-shareholder threshold, you must hold the security at risk for at least 45 days (excluding the day of purchase and the day of sale) around the ex-dividend date. The small-shareholder exemption applies if your total franking credits for the year are under $5,000.

Do international ETFs (like VGS or IVV) pay franking credits?

No. Franking credits only attach to dividends paid by Australian companies that have paid Australian company tax. International ETFs may instead pass through foreign income tax offsets (FITOs) for tax already withheld in overseas jurisdictions.

Can I claim franking credits if I am a non-resident for tax purposes?

Generally no. Non-residents cannot claim a refund of excess franking credits. However, fully franked dividends paid to non-residents are not subject to Australian dividend withholding tax.

What is the difference between franking percentage and franking credit?

The franking percentage is the proportion of the dividend that has had company tax paid on it (commonly 100% for fully franked or less for partially franked). The franking credit is the dollar value of that pre-paid tax attached to your specific dividend. A 50%-franked $1,000 dividend produces a franking credit of $214.29, not $428.57.

How are franking credits reported on my tax return?

Your dividend statement or AMIT Member Annual Statement shows the franked amount and the franking credit. These flow into the Dividends section of your individual tax return (Item 11 for most individuals). The ATO pre-fill service usually populates them automatically from broker and registry data.

Does ETFLens advise on franking strategy?

No. ETFLens provides general information and calculation tools only. We do not provide personal tax or financial advice.