Your loan from the company
All amounts in $. Change any figure and the page recalculates. Yellow boxes are waiting for an entry.
The repayment year
Interest is added at the benchmark rate, then the repayments come off. The minimum yearly repayment is due by 30 June.
Loan balance over the year ($)
What applies to this loan
Repayments to the end of the term
Starting from the balance you entered, and assuming exactly the minimum is repaid each year. Years marked "assumed" use the rate you set for years the ATO has not yet published.
Minimum repayment each year ($)
Benchmark interest rate by income year
The ATO sets one rate for each income year. The rate for the repayment year applies to the whole loan for that year, whenever the loan was made.
The deadlines, in order
The loan is made
A payment or loan from the company to a shareholder or an associate in an income year.
Written agreement by the lodgment day
Repay the loan, or put a written complying agreement in place, before the earlier of the due date and the actual lodgment date of the company's return for that year.
Interest at least at the benchmark rate
The agreement charges interest at or above the benchmark rate each year. The company includes that interest in its income.
First minimum repayment the next year
The first minimum yearly repayment is due by 30 June of the income year after the loan was made, then by each 30 June until the term ends.
About this calculator
Purpose. To estimate the minimum yearly repayment on a Division 7A complying loan from a private company to a shareholder or associate, how much of it is interest, the balance at the end of the year, the schedule to the end of the term, and any shortfall that would be treated as a dividend.
Assumptions and why we chose them. You can change every assumption above that is not set by law.
- Benchmark interest rates are those published by the ATO for each income year from 2021-22 to , at rates in force at . The 2026-27 rate is .
- Years in the schedule after the latest published year use the latest published rate, because the next rate is not yet known. You can change it.
- The minimum is worked out with the ATO formula on the opening balance and the years left in the term. Interest for the year is the opening balance times the benchmark rate, as if repayments were made on 30 June.
- The schedule assumes exactly the minimum is repaid each year and no new amounts are borrowed.
- The tax on a shortfall uses resident tax rates for the repayment year (2025-26 or 2026-27; earlier years use 2026-27 rates) and the 2% Medicare levy. The dividend is unfranked, so it carries no franking credits.
- Today's dollars use 2.5% inflation, the middle of the Reserve Bank's target band, measured to each 30 June due date.
Limitations and their effect.
- It does not work out the company's distributable surplus. If the surplus is lower than the shortfall, the dividend is lower than shown; if it is nil, there is no dividend that year, but the loan is still not on complying terms.
- Interest actually charged under the agreement depends on when repayments are made. Repayments earlier in the year usually mean less interest and a lower closing balance than shown.
- It covers one loan. Amalgamated loans, unpaid present entitlements owed to a company, debt forgiveness, use of company assets, guarantees, interposed entities and section 100A are not modelled, and any of them can change the result.
- It does not model what happens to later years after a shortfall, or relief under section 109RD for an honest mistake or inadvertent omission.
- Loans made before 4 December 1997 are outside these rules.
- Botanica Accounting does not provide credit assistance. Speak with a licensed lender or broker about finance.