Australian company tax calculator
Two rates, one test. Calculates company tax payable, the franking credits generated, and the maximum fully franked dividend the company can distribute this year. ITAA 1997 + ITRA 1986.
The company
Assessable income less allowable deductions.
Including connected entities and affiliates. Under $50M is required for the BRE rate.
BREPI: interest, dividends, royalties, rent, etc. Must be ≤80% to qualify for the 25% rate.
Result
- Classification
- Base rate entity (25%)
- Company tax
- $125,000.00
- After-tax profit
- $375,000.00
- Franking credits generated
- $125,000.00
- Max fully franked dividend
- $375,000.00
- Base rate entity: aggregated turnover $3,000,000 < $50,000,000 cap AND ≤80% passive income. Taxed at 25%.
- Franking rate = company tax rate. Each $1 of fully franked dividend carries a franking credit of 0.3333.
Want to see what shareholders actually receive after the dividend is taxed in their hands? Open the franking credit calculator →
Frequently asked questions
What is the company tax rate in Australia?+
There are two rates. The base rate entity (BRE) rate is 25% and applies to companies whose aggregated turnover is under $50M AND whose base rate entity passive income (BREPI) is no more than 80% of assessable income. Every other company pays the general rate of 30%. There is no marginal-relief band between the two, no associated-companies adjustment, and no state or territory company tax.
What is the base rate entity passive income (BREPI) test?+
BREPI captures interest, dividends (other than non-portfolio dividends), royalties, rent, gains on qualifying securities, and net trust/partnership income to the extent it derives from passive sources. If more than 80% of a company's assessable income is BREPI it cannot be a base rate entity and pays 30%, even if its turnover is well under $50M. The test is designed to keep the 25% rate aimed at trading businesses, not passive investment vehicles.
How are franking credits generated?+
Whenever a company pays Australian income tax, it credits its franking account by the amount of the tax. A BRE franks at 25%; a 30% company franks at 30%. When the company later pays a fully franked dividend it attaches a franking credit equal to the cash dividend × rate / (1 − rate). The maximum fully franked dividend a company can pay equals its after-tax profit.
Does the franking rate always match the company tax rate?+
Almost — but with one trap. A company that paid 30% tax in a prior year can only frank current-year dividends at the BRE 25% rate if it is a BRE for the current year, even though the franking account balance was built at 30%. This produces 'stuck' franking credits that may be lost. Modelling that across years is beyond the scope of this calculator.
Is there marginal relief between 25% and 30%?+
No. Unlike the UK, Australia does not interpolate between the small and main company tax rates. A company is either a base rate entity (entirely 25%) or it is not (entirely 30%). The cliff edge can matter when a company is near the $50M turnover cap.
Not tax advice. Estimates based on Income Tax Rates Act 1986, ITAA 1997, and the published ATO definition of base rate entity passive income (Law Companion Ruling LCR 2019/5). Does not model R&D tax offset, loss carry-back, franking deficit tax, or the 'stuck credits' trap when the franking rate moves between years.