Why use this calculator
Dividend income from Australian shares comes with franking credits that can significantly reduce your tax bill or generate a cash refund. This calculator shows your real after-tax income, including the benefit of franking credits — giving you a true picture of what your dividend portfolio earns.
How to use it
Enter the share price, annual dividend per share (from company announcements or DRP data), number of shares, and franking percentage (most Australian companies pay 100% franked dividends). Select your marginal tax rate to see your net income after tax.
The formula
Gross Yield = Dividend ÷ Share Price × 100. Franking Credit = Dividend × Franking% × (30 ÷ 70). Grossed-Up = Dividend + Franking Credit. Net Refund = Franking Credits − Tax On Grossed-Up Dividend.
Worked examples
$45 share price, $2.50 dividend, 1,000 shares, 100% franked, 30% tax rate
5.56% yield, $2,500 income, $1,071 franking credits, net benefit at 30% = franking covers tax
Same investment, 16% tax rate
$1,071 franking credits vs $571 tax = $500 cash refund
When people use it
- Comparing dividend stocks
- Estimating franking credit refunds at tax time
- Income planning from a share portfolio
- Calculating yield on a proposed investment
Tips
- Fully franked Australian dividends are very tax-effective for low and middle income earners
- If your marginal rate is below 30%, you receive a cash refund for the difference in franking credits
- Franking credits don't apply to foreign shares — international ETFs and stocks have no franking
- Dividend yield alone doesn't tell the full story — consider payout ratio and dividend growth
- Dividend reinvestment plans (DRPs) let you reinvest dividends to buy more shares, often at a small discount
Questions people ask
- What are franking credits?
- Franking credits (also called imputation credits) represent tax already paid by the company at the 30% corporate rate. When you receive a franked dividend, you get credit for this prepaid tax, which offsets your personal tax liability. If your rate is below 30%, you receive a cash refund for the excess.
- How do I know if a dividend is franked?
- Company dividend announcements state the franking percentage. Most large Australian companies (banks, miners, retailers) pay 100% franked dividends. The annual tax statement from your broker shows your franking credits.
- Can I get a cash refund from franking credits?
- Yes — if your marginal tax rate is below 30% (including retirees with nil tax rate), the excess franking credits are refunded as cash. This makes fully-franked Australian shares particularly attractive for low-income earners and retirees.