What is the franking percentage?

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 frankable distribution, rather than the whole of the distribution. Thus in the circumstances where a distribution contains both a frankable and unfrankable element, the franking percentage may be 100% even where only part of the total distribution is frankable.

The franking percentage is the lesser of 100% or the amount calculated using the following formula:

Franking credit allocated to the
          frankable distribution          

Maximum franking credit for the (frankable) distribution



The franking percentage in respect of the first frankable distribution made in the franking period will establish the benchmark franking percentage. Under the new imputation system all frankable distributions made within a franking period must be franked in accordance with this benchmark franking percentage.

For more information on (i) the franking period, (ii) the benchmark franking percentage, and (iii) the benchmark rule refer to Simplified imputation: the benchmark and anti-streaming rules.

Example 3: Identifying the franking percentage for a distribution

This example continues on from Example 2. On 21 August 2002 Marlyn Pty Ltd distributed the $10,000 to its shareholders. Marlyn Pty Ltd allocated franking credits of $3,000 to the distribution. The franking percentage for this distribution is:


X      100%      =      100%

Therefore, the frankable distribution of $7,000 is franked to 100% - a fully franked dividend.

    Last modified: 17 Dec 2015QC 16619