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Dividend tax in Australia 2026
Australia's imputation system means dividends arrive with 'franking credits' for the 25%–30% company tax already paid: you gross up the dividend, apply your marginal rate, then subtract the credits — low-rate taxpayers actually receive cash refunds of excess credits.
A fully franked dividend costs a top-rate taxpayer roughly 24% more tax, while a retiree on a 0% rate gets the whole company tax back.
At a glance
- top rate
- Effective ≈ 24% extra for top-bracket holders of fully franked dividends
- entry band
- Refund of credits for taxpayers below the company rate
- tax year basis
- 1 July – 30 June
- filing deadline
- 31 October return
- residency basis
- Residents: worldwide dividends at marginal rates
- regime flag
- Excess franking credits are refundable in cash
Rates
How dividends are taxed (2025/26)
| Rate | Base | Applies to |
|---|---|---|
| Marginal rates (0%–45% + 2%) | Grossed-up dividend, less franking credits | Franked dividends from Australian companies |
| Marginal rates (0%–45% + 2%) | Cash dividend | Unfranked dividends and most foreign dividends (foreign tax credited) |
| 0% withholding | — | Fully franked dividends paid to non-residents |
| 30% final withholding | Gross | Unfranked dividends to non-residents — typically 15% under treaties |
Thresholds & allowances
- Franking refundUnused credits paid out in cash
A signature feature — retirees and super funds routinely collect refunds
Residency
Residency trigger
Residents include worldwide dividends in assessable income at marginal rates, with franking credits for Australian dividends and foreign tax offsets for overseas ones.
Non-resident treatment
Non-residents face no withholding on fully franked dividends (the company tax has already been paid) and 30% — usually 15% by treaty — on unfranked amounts, all final.
Notes
- Private-company loans and payments to shareholders can be reclassified as unfranked deemed dividends under anti-avoidance rules.
- Interest and royalties received by residents are ordinary assessable income — no separate schedular rates.
- Franking refunds make Australian shares unusually attractive inside low-taxed structures like pension-phase super funds.
FAQ
How are dividends taxed in Australia?
At your marginal rate on the grossed-up amount, minus franking credits for the 25%–30% company tax already paid. A 45%-bracket investor tops up roughly 24 points; a 0%-rate retiree gets the company tax refunded in cash.
Do non-residents pay Australian dividend withholding?
Not on fully franked dividends — 0%. Unfranked dividends carry a 30% final withholding, cut to about 15% under most treaties.
Figures: tax year 2025/26 (July–June basis), compiled from public sources. Not tax advice.