Took money out of your company? You’re in Div 7A territory — and getting the minimum yearly repayment wrong triggers a deemed dividend taxed at your top marginal rate.
This free calculator gives you the minimum yearly repayment (MYR) under a complying loan agreement, plus a full amortisation schedule to maturity.
Division 7A Loan Calculator
Minimum yearly repayment and amortisation schedule for complying Div 7A loans.
Loan details
Compliance check (optional)
Three steps, thirty seconds
Enter the loan
Loan balance at the start of the income year, year the loan was originally made, and whether it’s unsecured (7-year) or secured by real property (25-year).
Pick the year
The income year you’re calculating. The MYR formula uses the remaining years on the original term plus the ATO benchmark rate.
See the schedule
MYR for the current year, plus a full amortisation schedule to maturity showing opening balance, interest, repayment, and closing balance year by year.
What it is and why it matters
Division 7A of the Income Tax Assessment Act 1936 prevents private company shareholders from extracting profits as “loans” instead of taxable dividends. If you take money from your company that isn’t salary, a properly-documented dividend, or a complying loan, the ATO treats it as an unfranked deemed dividend — taxed at your top marginal rate with no franking credit.
| Element | Requirement |
|---|---|
| Written loan agreement | Signed before the company’s lodgement day for the year the loan was made. |
| Maximum term | 7 years unsecured; 25 years if secured by registered mortgage over real property worth ≥110% of loan. |
| Minimum interest rate | ATO benchmark interest rate published annually (8.37% for FY2025-26). |
| Minimum yearly repayment | Calculated by formula — principal-and-interest amortisation over remaining years. |
| Consequence of failure | Shortfall treated as unfranked dividend in shareholder’s hands — top marginal rate, no franking credit. |
Questions we hear a lot
What’s the current benchmark interest rate?
The ATO publishes the Div 7A benchmark interest rate each year (effective 1 July). For FY2025-26 it is 8.37%, down from 8.77% in FY2024-25. Always check the current rate at ato.gov.au before doing your MYR calculation — using the wrong year’s rate creates a shortfall.
What if I don’t have a written loan agreement?
Without a complying written agreement signed before the company’s lodgement day, the entire loan balance becomes a deemed dividend at the end of the year — taxed at your top marginal rate with no MYR option available. Get the paperwork in place urgently if you don’t have it.
Can I get the loan term extended to 25 years?
Only if the loan is secured by a registered mortgage over real property worth at least 110% of the loan balance. The mortgage must be in place at the time the loan is made — you can’t retro-fit security to extend the term.
What happens if I repay the loan early?
Allowed. The amortisation continues based on the remaining balance × remaining years × current rate, so early repayments reduce future MYR. Track repayments carefully — Trinity uses dedicated Div 7A registers for our clients.
What if the company forgives the loan?
Loan forgiveness creates an immediate deemed dividend equal to the forgiven amount — taxed in the shareholder’s hands. There are limited exceptions for shareholder dies, hardship, or commercial debt forgiveness rules — get specific advice.
Where does my data go?
Nowhere. The tool runs entirely in your browser.
What about UPEs (Unpaid Present Entitlements) from a trust?
This is the major recent Div 7A issue. UPEs from a trust to a corporate beneficiary can be treated as deemed loans if not converted to a complying loan or placed on sub-trust by lodgement day. The rules tightened materially in TD 2022/11 — get advice on every UPE.
