#### The franking percentage

A fully franked distribution is a distribution that attaches the maximum franking credit. That is, the distribution is 100% franked.

A distribution can also be partly franked with a franking percentage of less than 100%.

The franking percentage is a measure of the extent to which a frankable distribution has been franked.

It is expressed as a percentage of the maximum franking credit, rather than the whole of the distribution.

The franking percentage is worked out by dividing the franking credit allocated to the frankable distribution by the maximum franking credit for the frankable distribution and describing it as a percentage. If this percentage exceeds 100% then the franking percentage is 100%.

Example: franking percentage
In the previous example Popsicle Pty Ltd had \$7,000 to distribute to its shareholders.

The maximum franking credit that Popsicle Pty Ltd could allocate to this frankable distribution was calculated as \$3,000.

End of example

Example

If Popsicle attaches \$1,500 of franking credits to the \$7,000 distribution the franking percentage is 50%.

End of example

Example: determining the franked part and the unfranked part
Marlyn Pty Ltd has \$10,000 that it wants to distribute to its shareholders. Marlyn Pty Ltd has \$3,000 available franking credits in its franking account.

The maximum franking credit that Marlyn Pty Ltd could allocate to this frankable distribution is:

Marlyn Pty Ltd allocated franking credits of \$3,000 to the distribution.

The franking percentage for this distribution is:

The franked part of the distribution is:
\$3,000 x 70% / 30% = \$7,000

The unfranked part of the distribution is:
\$10,000 - \$7,000 = \$3,000

End of example