Company tax calculator.
Tax on your company's profit at 25% or 30%, the franking credits it creates, and how the same profit would be taxed in your own name as a sole trader.
- Registered Tax Agent No. 26266813
- Regulated by the TPB
- CPA & IPA members on our team
Company tax and franking.
Quick answer
Company tax is a flat 25% of taxable income for base rate entities (turnover under $50 million, passive income 80% or less) and 30% for other companies. There is no tax-free threshold and no Medicare levy. Tax paid becomes franking credits that shareholders use when dividends are paid.
Rates
| Company | Rate 2025–26 and 2026–27 | Maximum franking |
|---|---|---|
| Base rate entity | 25% | 25/75 (a $75 dividend carries a $25 credit) |
| All other companies | 30% | 30/70 (a $70 dividend carries a $30 credit) |
The two-layer picture
Company tax is the first layer. The second comes when profit reaches you. Paid as wages or director's fees, it is deductible to the company and taxed at your marginal rate (with super guarantee on top). Paid as a franked dividend, you include the cash plus the franking credit in your income and claim the credit back — so the total tax ends up at your marginal rate, with the company's 25% as a prepayment. Left in the company, the profit has borne 25% and nothing more, which is where the real advantage lies for a business that is reinvesting.
Example: $150,000 profit, 2026–27
| Structure | Tax this year | Notes |
|---|---|---|
| Company (base rate entity) | $37,500 | $112,500 retained, $37,500 of franking credits created |
| Sole trader, no other income | $38,570 | $36,570 tax − $1,000 offset + $3,000 Medicare levy |
At this level the difference is small while the profit is retained, and disappears when it is paid out. Below about $135,000 the sole trader usually pays less this year; above it, the company defers more. The deciding factors are usually risk, growth, family income splitting through dividends and what the business will look like in five years — which is a conversation, not a calculator.
Division 7A
The trap for owner-managed companies: taking money out without wages, dividends or a complying loan agreement. Amounts drawn are treated as unfranked dividends unless they are repaid or put on a Division 7A loan with minimum annual repayments at the benchmark rate (8.37% for 2025–26, 8.77% for 2026–27). Our Division 7A guide covers the mechanics.
Sources: ATO — Company tax rates, Base rate entity company tax rate, Division 7A benchmark interest rate. General information only, not advice. Structure decisions depend on your circumstances.
Company tax returns from $550.
Financial statements, company return, franking account, Division 7A and ASIC compliance — handled year-round by registered tax agents for companies anywhere in Australia.
Company tax — your questions.
What is the company tax rate in Australia?
25% for base rate entities and 30% for all other companies. A base rate entity is a company with aggregated turnover under $50 million whose passive income (interest, rent, dividends, royalties, net capital gains) is 80% or less of its assessable income. Most small trading companies qualify for 25%.
Is 25% company tax a saving compared with being a sole trader?
Only while the profit stays in the company. Once it is paid out as wages it is taxed at your marginal rate; paid out as a dividend it carries a franking credit for the company tax already paid and the shareholder pays the difference (or gets a refund) at their own rate. The lasting benefit is deferral and the ability to retain profits for growth at 25% — plus asset protection — not a permanent lower rate.
What are franking credits?
When a company pays a dividend out of taxed profits it can attach a credit for the company tax paid. The shareholder includes the dividend plus the credit in their income, then offsets the credit against their own tax. A base rate entity can frank dividends at 25/75 — $750 of dividend carries a $250 credit. Franking credits are refundable to individuals and super funds whose tax is below the credit.
Can I just take money out of my company?
Not without tax consequences. Money taken by a shareholder or associate that is not wages, a dividend or a properly documented loan is treated as an unfranked dividend under Division 7A. A complying Division 7A loan needs a written agreement, a maximum term (7 years unsecured) and minimum repayments at the benchmark rate — 8.77% for 2026–27. Our Division 7A guide explains the options.
When is company tax paid?
Companies pay PAYG instalments quarterly (or monthly for larger ones) based on the previous year's tax, then settle the balance when the company tax return is lodged. Company returns prepared by a registered tax agent are generally due 15 May following the financial year, or earlier for larger or late-lodging companies. First-year companies have no instalment history and pay the whole year's tax after lodgment.
What does a company cost to run?
Beyond tax: ASIC's annual review fee, a registered office, separate financial statements and tax return, payroll and STP if you pay yourself wages, and workers compensation. Expect higher accounting fees than a sole trader. Our company set-up and compliance page lists the obligations, and the structures guide helps you decide whether a company is worth it.
More questions? See the full FAQ or ask us directly.
Keep going.
Sole trader tax calculator
Tax on business profit, with the small business offset.
Learn moreGST calculator
Add or remove 10% GST from any amount.
Learn moreBusiness structures guide
Sole trader, company or trust — compared.
Learn moreDivision 7A loans
Taking money out of your company without a tax surprise.
Learn moreThe right structure, run properly.
Company set-up, tax and ASIC compliance for businesses Australia-wide.