Dividends: Franked v Unfranked

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One common area of confusion seems to be the difference between franked dividends and unfranked dividends.

What is a dividend?

A dividend is the part of a company’s profit which is distributed to shareholders. If you own shares in a public company, you probably have dividend income to declare.

What does it mean by ‘franked’?

The franked portion of your dividend has already been taxed; the company has already paid tax on this profit at the 30% company tax rate. The good news for you is that you can claim an imputation credit of 30% of the franked amount (that way, the ATO is not double-dipping).

What about ‘unfranked’?

The unfranked portion of dividends has not yet been taxed. This is treated the same as any other revenue, ie. it becomes a part of your taxable income.

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Besides accounting, Christie is passionate about all things small business, lifelong learning and chocolate. She spends her leisure time blogging and playing Rail Nation (shhh!.... that's a secret). You can contact Christie directly at


  1. hi Christie,

    Can you please let me know the accounting treatment for unfranked dividend if company pays unfranked dividend (ie. Unfranked dividend payment to parent company for the amount of $ 100,000)?
    what are the other Debit and Credit accounts related to this particular transaction apart from below ledgers for taxation purposes?
    DR Dividend Account $ 100,000
    CR Bank $ 100,000


  2. I am a disabled pensioner as is my wife. When I left the workforce the company I worked for arranged for a number of shares to be paid to me after negotiations with the ATO. I received a div stmt recently in which my div was
    DIv =$705.76,
    F = $494.04,
    FC = $211.73,
    UF = $211.76
    I have already submitted a form to state that I did not have sufficient income on which to pay tax even with the total income from this div payment I still would be under the tax threshold. As I have submitted the earlier form and my income from this share is so small I figure it would be too expensive to get a tax consultant not to do a a refund of Franking Credit claim. With this in mind, can you tell me how much I would get refunded.
    Sadly, I am still trying to get my head around the definition of the F, UF & FC elements.

    Can you help me, more importantly, will you help me understand each of these elements and how my statement relates to each one. A teaching point, if you will.

    I do not mind if you use hypothetical figures instead of my actual and assume the total theoretical income is not subject to further income tax.
    Others may benefit from this example.

  3. Hi I am currently a math student at school. I was wondering how you find out how much tax has been franked on shares. So if the share is fully franked how would you find this out?

  4. Years ago I started on the seoncd path you listed to passive income. I wouldn’t say it was passive income with no investment, but it was certainly minimal investment.I have my main source of income from my self-employed business and I love that, but it’s nice having some extra coming in each month more or less on auto-pilot.For me this includes niche websites, video marketing, and a few other things. All required a bit of work to set up and some money spent to outsourcers just to speed up the process, but now they run themselves and have almost no maintenance costs in time or money.It’s really rinse and repeat and if you have the time you can do it 100s of times over. Even if each site only earns $100 a month it will add up.

  5. Excellent article. I will be facing many of these issues as

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