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Division 7A calculator 2026-27
Took money out of your company that isn't wages or a dividend? Work out the minimum yearly repayment on your Division 7A loan for 2026-27, the interest, and what's left to pay before 30 June.
Loan balance if you pay the minimum each year
Assumes the benchmark rate stays at 8.77%. It's reset every year, so future repayments will change.
| Income year | Opening | Minimum | Interest | Closing |
|---|---|---|---|---|
| 2026-27 | $100,000 | $19,716 | $8,770 | $89,054 |
| 2027-28 | $89,054 | $19,716 | $7,810 | $77,148 |
| 2028-29 | $77,148 | $19,716 | $6,766 | $64,198 |
| 2029-30 | $64,198 | $19,716 | $5,630 | $50,112 |
| 2030-31 | $50,112 | $19,716 | $4,395 | $34,791 |
| 2031-32 | $34,791 | $19,716 | $3,051 | $18,126 |
| 2032-33 | $18,126 | $19,716 | $1,590 | $0 |
In short: On a $100,000 Division 7A loan with a 7-year unsecured agreement, the minimum yearly repayment for 2026-27 is about $19,716 at the 8.77% benchmark rate. About $8,770 of that is interest the company has to declare as income. Miss the minimum by 30 June and the shortfall can be taxed as an unfranked dividend.
How it works
What counts as a Division 7A loan
Money a private company lends or pays to a shareholder or their associate, like personal bills paid from the business account or a director's loan account in debit, that isn't wages or a dividend. Unless it's repaid or put under a written loan agreement before the company's tax return is due, it can be treated as a dividend.
How the minimum repayment works
Each year's minimum is based on the balance at the end of last year, the years left on the agreement (7 unsecured, or 25 if secured by a registered mortgage over real property) and that year's benchmark rate. The rate is reset each July, so the repayment changes even on an old loan.
FAQ
Common questions
What is the Division 7A benchmark interest rate for 2026-27?
8.77%, up from 8.37% in 2025-26. It applies to every complying loan for the 2026-27 income year, including loans made in earlier years.
How do you calculate the Division 7A minimum yearly repayment?
Balance at the end of last income year × benchmark rate ÷ (1 − (1 + benchmark rate) to the power of minus the years left on the agreement). That's the same as a principal and interest repayment over the remaining term at that year's rate.
Is a minimum repayment due in the year the loan is made?
No. The first minimum repayment is due by 30 June of the income year after the loan was made, worked out on the balance at the end of the first year.
What happens if I miss a Division 7A repayment?
The shortfall can be treated as an unfranked dividend from the company and taxed at your marginal rate. The ATO can disregard it or allow it to be franked in limited cases, such as an honest mistake you fix quickly, but don't count on that.
Can I use a dividend to make the repayment?
Yes, a lot of owners do. The company declares a dividend and it's offset against the loan, so no cash changes hands, but the dividend is still taxable income for you. It's worth planning this before 30 June.
Tax & Accounting
Read before you decide
General information only. These calculators give estimates based on the figures you enter and published rates, and don't consider your objectives, financial situation or needs. They're not a quote, credit assessment or tax advice. Elephant Financial Pty Ltd trading as Elephant Advisory is an authorised credit representative (ACR 487962) of Yellow Brick Road Aggregation Pty Ltd, Australian Credit Licence 390261.
