Benchmark interest rates
Under Division 7A of Part III of the Income Tax Assessment Act 1936, the 'benchmark interest rate' for an income year is the 'Indicator Lending Rates – Bank variable housing loans interest rate'. This is the 'Housing loans; Banks; Variable; Standard; Owner-occupier' rate last published by the Reserve Bank of AustraliaExternal Link before the start of the income year. The benchmark interest rate for an income year does not change if the Reserve Bank of Australia later revises its published rate after the start of the income year.
Current and past benchmark interest rates
These rates apply to private companies with an income year ending 30 June.
A private company that meets certain requirements may adopt an income year ending on a date other than 30 June – a substituted accounting period. Those companies will need to determine the relevant rate.
Income year ended 30 June |
Rate |
ATO reference |
|---|---|---|
2024 |
8.27% |
This is the 'Indicator Lending Rates - Bank variable housing loans interest rate' published by the Reserve Bank of Australia on 7 June 2023. |
2023 |
4.77% |
This is the 'Indicator Lending Rates - Bank variable housing loans interest rate' published by the Reserve Bank of Australia on 2 June 2022. |
2022 |
4.52% |
This is the 'Indicator Lending Rates - Bank variable housing loans interest rate' published by the Reserve Bank of Australia on 2 June 2021. |
2021 |
4.52% |
This is the 'Indicator Lending Rates - Bank variable housing loans interest rate' published by the Reserve Bank of Australia on 2 June 2020. |
2020 |
5.37% |
This is the ‘Indicator Lending Rates - Bank variable housing loans interest rate’ published by the Reserve Bank of Australia on 4 June 2019. Note: Annual Taxation Determinations for the benchmark interest rate are no longer published. |
2019 |
5.20% |
Substituted accounting period
If a private company has adopted a substituted accounting period, the applicable benchmark interest rate is the 'Housing loans; Banks; Variable; Standard; Owner-occupier' rate last published by the Reserve Bank of AustraliaExternal Link before the start of the private company's substituted accounting period.
Example 1: substituted accounting period starting on 1 November 2022
Company ABC has a substituted accounting period starting on 1 November 2022. According to the Reserve Bank of Australia website, the last interest rate published before 1 November 2022 was 6.77%. This was the rate for September 2022, published in October 2022. The benchmark interest rate for Company ABC's income year commencing 1 November 2022 is 6.77%.
End of example
Example 2: substituted accounting period starting on 1 May 2023
Company XYZ has a substituted accounting period starting on 1 May 2023. According to the Reserve Bank of Australia website, the last interest rate published before 1 May 2023 was 8.02%. This was the rate for March 2023, published in April 2023. The benchmark interest rate for Company XYZ's income year commencing 1 May 2023 is 8.02%.
End of exampleDivision 7A calculator and decision tool
Access the Division 7A calculator and decision tool.
This tool will help you determine the effects and your obligations on Division 7A – Loans by private companies.
Find the benchmark interest rate and calculator and decision tool for Division 7A loans made by private companies.