How are dividends and franking credits taxed?
Understand dividends, franking credits, and what the ATO says investors need to declare.
Summary
Dividends are generally investment income that needs to be declared. Franking credits can also affect the tax outcome because they represent tax already paid by the company on profits distributed as franked dividends.
What this means
Dividend statements usually show the dividend amount and any franking credit.
Investors need to report dividend income correctly, including franked and unfranked amounts where relevant.
Typical actions
- Keep dividend statements from companies, brokers, or share registries.
- Check pre-filled dividend information against your records.
- Declare dividend income and franking credits where required.
- Ask a registered tax agent if dividend arrangements are complex.
Official ATO sources
Last checked: 20 June 2026
Dividends
Explains dividend income and franking credits.
Investment income
ATO hub for investment income.
Shares and similar investments
ATO hub for shares and similar investments.
Related questions
- How is interest income taxed?
- What happens when I sell shares?
- What is capital gains tax?
- What records should investors keep?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
Need help understanding this in plain English?
Try the Tax Clarity App for a plain-English answer.