What is franked income?
Franked income is dividend income that carries a credit for Australian company tax already paid. Eligible Australian taxpayers may use the franking credit to reduce their own tax liability.
Key points
- A fully franked dividend carries the maximum available franking credit for that payment.
- The headline dividend yield may not show the value of franking credits.
- Tax outcomes depend on the investor's circumstances and current tax rules.
What to check next
Check the dividend amount, franking percentage, payment dates and whether the dividend is supported by sustainable earnings and cash flow.
Reviewed by Sovest for plain-English financial education. For education and research only—not financial advice.