Division 7A Minimum Yearly Repayment Formula (2025-26)
Last reviewed:
Primary tax-year context: 2025-26
This article is general information only. We maintain pages using primary-source checks and date-based reviews. See editorial policy.
General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.
If you have a complying Division 7A loan, you must make a minimum yearly repayment (MYR) by 30 June each year.
For the 2025-26 income year, the benchmark rate is 8.37%.
MYR formula
The standard amortization formula is:
MYR = Opening balance x [r(1+r)^n / ((1+r)^n - 1)]
Where:
r= benchmark interest rate for the yearn= remaining term (years)- opening balance = loan balance at start of year
Worked example
Assume:
- opening balance: $100,000
- unsecured loan term: 7 years
- benchmark rate: 8.37%
Using the formula, year 1 MYR is about $19,558 (principal + interest).
Deadline that matters
The MYR must be paid by 30 June for that income year.
If you do not make the full MYR by 30 June, the shortfall can be treated as a deemed unfranked dividend under Division 7A.
Common MYR mistakes
- Using last year’s benchmark rate.
- Calculating interest only (not principal + interest).
- Paying after 30 June and assuming it still counts.
- Not documenting opening balance adjustments.
Practical checklist (2025-26)
- Confirm benchmark rate for the year.
- Recalculate MYR at start of year.
- Set repayment schedule before June.
- Keep payment evidence and loan schedule.
Use the Division 7A calculator to generate repayments quickly and cross-check your numbers.