Company Tax Calculator Australia (2026–27)
Calculate Australian corporate tax liabilities under current ATO rules. Model Base Rate Entity 25% tax rates, 30% full corporate rates, franking account credits, Division 7A rules, and after-tax retained profits.
Estimated Company Tax
$95,000
Calculated at the corporate tax rate of 25%.
Net Profit After Tax (NPAT)
$285,000
Franking Credits Generated
$95,000
Company Tax Breakdown
1. The Australian Corporate Tax System (2026–27)
Company tax in Australia is governed by the Income Tax Assessment Act 1997.
Proprietary limited (Pty Ltd) companies pay a flat tax rate on net taxable profit. Small active trading businesses qualify for the 25% Base Rate Entity tax rate, while larger entities pay 30%.
2. Corporate Net Profit & Tax Liability Benchmarks
| Net Taxable Profit | Base Rate Tax (25%) | Full Rate Tax (30%) | Franking Credits Generated | Retained Earnings |
|---|---|---|---|---|
| $100,000 Net Profit | $25,000 Tax (25%) | $30,000 Tax (30%) | $25,000 Franking Credits | $75,000 Retained Earnings |
| $250,000 Net Profit | $62,500 Tax (25%) | $75,000 Tax (30%) | $62,500 Franking Credits | $187,500 Retained Earnings |
| $500,000 Net Profit | $125,000 Tax (25%) | $150,000 Tax (30%) | $125,000 Franking Credits | $375,000 Retained Earnings |
| $1,000,000 Net Profit | $250,000 Tax (25%) | $300,000 Tax (30%) | $250,000 Franking Credits | $750,000 Retained Earnings |
3. The Mathematics of Corporate Tax & Franked Dividends
Company Tax Payable (Tax_co) for gross revenue (Rev), deductions (Deduct), and tax rate (r_co % = 25% or 30%) is:
Example Base Rate Entity Calculation ($250,000 Net Profit @ 25% Tax Rate):
- Company Tax Payable: $250,000 × 25% = $62,500.00 tax.
- After-Tax Retained Profit: $250,000 - $62,500 = $187,500.00.
- Franking Credit generated for shareholders on $187,500 dividend: $187,500 × (0.25 / 0.75) = $62,500.00 tax credit.
4. Step-by-Step Guide to Calculating Company Tax
Calculate Gross Company Revenue & Assessable Income
Sum total trading revenue, service fees, interest, dividends, and capital gains earned by the company.
Subtract Allowable Corporate Tax Deductions & Wages
Deduct operating expenses, employee salaries, director superannuation, depreciation, and interest paid.
Determine Base Rate Entity Status (25% vs 30% Rate)
Check aggregated turnover (<$50M) and passive income ratio (<=80%) to apply 25% or 30% tax rate.
Calculate Company Income Tax Payable & Franking Account Credits
Multiply net taxable profit by 25% or 30%; credit equal tax paid to the company Franking Account.
Determine After-Tax Retained Profits & Franked Dividend Capacity
Reconcile after-tax profit for reinvestment or distribution as fully franked dividends to shareholders.
5. Company Tax Mistakes & Checklist
Using Company Bank Accounts as a Personal Piggy Bank
Withdrawing company funds for personal living expenses without documentation, triggering Division 7A 47% tax penalties.
Incorrectly Claiming 25% Tax Rate on Investment Holding Companies
Applying the 25% rate when >80% of company revenue is passive interest/rent, leading to ATO tax shortfall penalties.
Over-Franking Dividends Above the Max Franking Credit Cap
Attaching 30% franking credits when the company paid tax at 25%, causing franking deficit tax liabilities.
Failing to Deduct Director Super Guarantee Contributions on Time
Paying director salaries without remitting 12.0% super by quarterly due dates, forfeiting tax deductibility.
Corporate Tax Compliance Checklist
Base Rate Entity Passive Income Ratio Audit (<=80%)
Audit passive investment income against trading revenue to ensure eligibility for the 25% tax rate.
Franking Account Register Maintenance (Franking Percentage)
Maintain an accurate Franking Account Register recording all corporate tax paid and credits issued.
Complying Division 7A Loan Agreement Execution
Execute written 7-year loan agreements with benchmark ATO interest rates for director drawings.
ASIC Annual Company Solvency Resolution & Review
Pass annual director solvency resolution and pay ASIC annual review fee by anniversary date.
6. Annual Corporate Tax & Accounting Timeline
Corporate Financial Year Accounting Start
Initiate new financial year general ledger in corporate cloud accounting software.
Quarterly PAYG Instalments & IAS/BAS
Pay quarterly PAYG company tax instalments and remit employee PAYG withholding tax.
Annual Stocktake & Director Dividend Resolutions
Finalize inventory stocktake; execute written director resolutions declaring franked dividends before 30 June.
Company Tax Return (Form C) Lodgment
Lodge Company Tax Return with the ATO; pay remaining corporate tax balance.
Disclaimer: This Company Tax calculator and guide are provided for general educational and informational planning purposes only. Base Rate Entity rules (25% rate, $50M turnover), 30% full corporate rate, franking account formulas, and Division 7A guidelines reflect 2026–27 Australian Taxation Office guidelines. This page does not constitute formal tax or accounting advice.
Charlotte Smith
Senior Personal Finance & Taxation Specialist at AussieSpot
Charlotte Smith is the lead personal finance advisor and workplace specialist at AussieSpot. Charlotte has over 12 years of experience helping Australian households build budgets, plan savings goals, and manage living costs.
Frequently Asked Questions (FAQ)
What is the Base Rate Entity company tax rate for 2026–27?
The company tax rate for a Base Rate Entity is 25%. A company qualifies as a Base Rate Entity if its aggregated annual turnover is under $50 million AND 80% or less of its assessable income is passive income (interest, dividends, rent, royalties).
Which companies must pay the higher 30% corporate tax rate?
Companies pay the full 30% corporate tax rate if aggregated turnover is $50 million or more, OR if more than 80% of company income is passive investment income (such as passive investment holding companies).
How do franking credits attach to company dividend distributions?
When a company pays tax at 25% or 30%, it generates franking credits in its Franking Account. When dividends are paid to shareholders, franking credits attach to the dividends, allowing shareholders to claim a tax credit on their individual tax returns.
What is Division 7A and why are director loans from a company strictly regulated?
Division 7A of the Income Tax Assessment Act 1936 treats payments, loans, or debt forgiveness from a private company to shareholders (or associates) as unfranked dividends, UNLESS secured by a complying 7-year or 25-year Division 7A loan agreement.
When is Company Tax due for lodgment and payment with the ATO?
For companies on a 30 June tax year, Company Tax Returns (Form C) lodged via a registered tax agent are generally due on 15 May of the following year (or 28 February for large/medium entities).