Division 7A Calculator — See Your Minimum Repayment at 8.37%
Calculate the minimum yearly repayment on a private company loan at the 2025-26 ATO benchmark rate of 8.37%. Enter your loan balance to see the full amortisation schedule for 7-year unsecured or 25-year secured Division 7A loans.
Division 7A of the Income Tax Assessment Act 1936 prevents shareholders of private companies from extracting company profits as tax-free loans. If a private company makes a loan to a shareholder (or their associate) and the loan doesn't meet certain requirements, it's treated as an unfranked deemed dividend.
To avoid this, the loan must either be fully repaid before the company's lodgement day, or placed under a complying loan agreement with minimum yearly repayments.
Division 7A benchmark interest rates
Financial year
Benchmark rate
2025-26
8.37%
2024-25
8.77%
2023-24
8.27%
2022-23
4.77%
2021-22
4.52%
The benchmark rate is based on the RBA's housing loan variable rate published before the start of the financial year.
Loan requirements
Unsecured loans
→Maximum term: 7 years
→Interest rate: Benchmark rate (min)
→Written agreement: Required
→Repayment: By 30 June each year
Secured loans
→Maximum term: 25 years
→Interest rate: Benchmark rate (min)
→Security: Registered mortgage over real property
→LVR requirement: Property value ≥ 110% of loan
→Repayment: By 30 June each year
Minimum yearly repayment formula
Repayment = Balance × r(1+r)^n / ((1+r)^n − 1)
Where: Balance = Opening loan balance for the year, r = Benchmark interest rate, n = Remaining years of the loan term.
→Interest component: $8,370, Principal component: $11,188
What happens if you miss a repayment?
If you don't make the minimum yearly repayment by 30 June, the shortfall is treated as an unfranked deemed dividend.
→The shortfall is added to your assessable income
→You pay tax at your marginal rate (up to 47%)
→No franking credits are attached
→The loan balance is not reduced by the shortfall
FAQ
What is the Division 7A interest rate for 2025-26?
The Division 7A benchmark interest rate for 2025-26 is 8.37%, reduced from 8.77% in 2024-25. This rate must be charged on complying Division 7A loans.
When is the minimum repayment due?
The minimum yearly repayment must be made by 30 June each income year. If you miss this deadline, the shortfall is treated as an unfranked deemed dividend.
Can I pay more than the minimum repayment?
Yes, you can pay more than the minimum repayment at any time. Any excess payment reduces the loan principal, which reduces future minimum repayments and total interest.
What's the difference between secured and unsecured loans?
Secured loans (backed by a registered mortgage) can have a 25-year term, resulting in smaller yearly repayments. Unsecured loans have a maximum 7-year term with larger yearly repayments but less total interest over the loan life.
Do I need to pay interest to the company?
Yes, the interest charged at the benchmark rate is payable to the company. This interest is assessable income for the company (15% tax for base rate entities) but is generally not deductible for the borrower unless the loan was used for income-producing purposes.
Is this an ATO Div 7A calculator?
This calculator applies the Division 7A benchmark rate and minimum repayment method used for complying Division 7A loans. It is an independent tool, not an official ATO calculator.
What if I can't afford the minimum repayment?
If you can't make the minimum repayment, the shortfall becomes a deemed dividend. You may want to consider refinancing, making the loan secured to extend the term, or declaring an actual dividend (which may have franking credits attached).
Tax Accuracy & Sources
Reviewed: March 2026 · Tax year: 2025-26
Estimates minimum yearly repayments for complying Division 7A loans. It does not determine loan character, distributable surplus limits, or all exceptions.