Franking credits
A credit for company tax already paid on your dividends.
When an Australian company pays you a dividend from profits it has already paid tax on, it can attach a franking credit for that tax. You include both the dividend and the credit in your income, then the credit reduces your tax bill — so the profit isn’t taxed twice. Extra credits can be refunded.
Grounded in ATO guidance. General information, not tax advice.
Related terms
CGT discount (50%)
Hold an asset over 12 months and only half the gain is taxed.
Marginal tax rate
The tax rate on your next dollar of income.
Tax-free threshold
The first $18,200 of income you can earn tax-free.
Medicare levy
A 2% levy on most taxable income that funds public health.
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