# Work out the tax on a franked dividend

See the franking credit on an ASX dividend, what it adds to your taxable income, and whether you'll pay more tax on it or get money back. Look up a recent dividend, or type in the numbers from your statement.

Runs on the same data as GET `/v1/dividends` in our API. [API reference ](https://quova.io/docs/income-and-corporate-actions/index.md#income.dividends)

## How franking credits work

When a company pays tax on its profits and then pays a dividend, it attaches a franking credit for the tax it already paid. You add the credit to the cash you received, which is called grossing up, and that total goes into your taxable income. Then the credit comes off the tax you owe.

Take a $70 fully franked dividend from a company paying 30% tax. The credit is $70 × 30 ÷ 70 = $30, so $100 goes into your income. At 32% including the Medicare levy the tax on that is $32, and after the $30 credit you pay $2\. On a 0% rate you'd get the $30 back instead.

## Partly franked dividends

Only the franked part of a dividend carries a credit. A $100 dividend that's 60% franked at 30% has $60 franked, for a credit of $25.71, and the other $40 is taxed like ordinary income with nothing to offset it. Put the franked percentage in and the calculator does the split.

## Questions

Yes. Individuals and super funds get any credit left over after their tax refunded when they lodge, so someone under the tax-free threshold gets the whole credit back. Companies don't get refunds, and carry the excess forward as a loss instead.

To claim the credit you need to have held the shares for at least 45 days around the ex date, not counting the days you bought and sold, or 90 days for preference shares. The rule doesn't apply if your franking credits for the whole year come to less than $5,000.

Base rate entities, which are companies with turnover under $50 million that mostly earn active income, pay 25% tax and frank their dividends at that rate. Most large ASX companies pay 30%.

Go with the statement. It's what the share registry reports, and what the ATO uses to pre-fill your return. Small differences usually come down to rounding.

No. It works out the numbers for one dividend at a rate you pick. Your actual tax depends on the rest of your income, offsets and deductions, so check anything important with your accountant or tax agent.

## More tax data and tools

- [**Exchange rates for tax** The rates the RBA, ATO, HMRC, IRS, ECB and Bank of Canada publish, apart from market FX.](https://quova.io/data/tax-exchange-rates/index.md)
- [**ASX dividends and franking** Franked percentage, franking credit, company tax rate and DRP price for every ASX dividend.](https://quova.io/data/au/asx-dividends/index.md)
- [**AMIT trust tax components** The tax components of each distribution from ASX listed ETFs and trusts, estimates and finals.](https://quova.io/data/au/amit-tax-components/index.md)
- [**ASX demerger cost base splits** How the ATO says to split your cost base after an ASX demerger, plus share splits and consolidations.](https://quova.io/data/au/demergers/index.md)
- [**Tax exchange rate converter** Convert foreign income and sales into AUD, GBP or USD at the rate your tax office publishes.](https://quova.io/tools/tax-exchange-rates/index.md)
- [**AMIT cost base calculator** Work out an ETF's cost base after years of AMIT adjustments, and the gain when you sell.](https://quova.io/tools/au/amit-cost-base/index.md)

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