Division 7A Calculator

Lent money from your company to yourself or an associate? Our Division 7A Calculator works out the minimum yearly repayment needed to keep your loan compliant and shows your full repayment schedule.

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What Does Our Division 7A Calculator Actually Calculate?

Our Division 7A Calculator works out the minimum yearly repayment required to keep a loan from a private company to a shareholder or associate compliant. It uses the loan amount, loan type (7-year unsecured or 25-year secured), the financial year selected, and how many years into the loan you are.

It also generates a full repayment schedule for the loan. This shows the opening balance, interest charged at the current benchmark rate, the repayment amount, and the closing balance for each year. That means you can see not just this year’s figure, but exactly how the loan pays down over its full term.

Let Us Set Up (or Fix) Your Div 7A Loan Agreement.

Whether you’re setting up a new loan or catching up on one that’s slipped, our tax professionals can put it back on solid ground.

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FAQs

Got Questions? We've Got Answers

Clear answers to the Division 7A questions business owners ask most.

What is Division 7A?

Division 7A is part of Australian tax law that stops private companies from paying shareholders or their associates tax-free. It does this by treating certain loans, payments, and forgiven debts as unfranked dividends, unless specific conditions are met.

What happens if I don’t make the minimum yearly repayment on a Div 7A loan?

The shortfall for that year is generally treated as an unfranked dividend, meaning the borrower is taxed on it as income, with no franking credits to offset the tax.

What’s the difference between a 7-year and 25-year Division 7A loan?

An unsecured loan can run for a maximum of 7 years. A loan secured by a registered mortgage over real property can run for up to 25 years, with different minimum repayment amounts as a result.

When does the first repayment on a Div 7A loan fall due?

No repayment is due in the year the loan is made. The first minimum yearly repayment is due by the company’s lodgment day for the following income year.

What is the Division 7A benchmark interest rate?

It’s the minimum interest rate a complying Division 7A loan must charge. It’s set each year based on the Reserve Bank of Australia’s indicator lending rate, so it can change from one financial year to the next.

Can a Division 7A loan be forgiven without tax consequences?

Generally no. Forgiving a Div 7A loan usually triggers a deemed dividend equal to the amount forgiven, unless a specific exception applies.

Does every loan from a company to a shareholder trigger Division 7A?

Not necessarily. Loans that are fully repaid before the company’s lodgment day, or documented as a complying loan with the right interest rate and repayments, can avoid being treated as a dividend.

Does this calculator check if my loan agreement is valid?

No. This calculator estimates the minimum yearly repayment only; it doesn’t check loan agreement validity, distributable surplus limits, or other Division 7A conditions, which is why professional advice matters.

Need Help Keeping Your Div 7A Loan Compliant?

From drafting a compliant loan agreement to fixing a missed repayment, our tax professionals can help you avoid an unexpected deemed dividend and keep your company’s loans on track.