Division 7A Calculator
Minimum Yearly Repayments, 2026-27 Benchmark 8.77%
Work out the minimum yearly repayment on a Division 7A loan from your private company, with the ATO benchmark rate for each year, and see the full repayment schedule to the end of the term.
Read the full answer — method, rates and figures
Quick answer: The Division 7A benchmark interest rate for the 2026-27 income year (ending 30 June 2027) is 8.77%, up from 8.37% in 2025-26. A complying loan from a private company to a shareholder or associate must charge at least that rate, run no longer than 7 years (25 if fully secured by a registered mortgage over property worth at least 110% of the loan) and be repaid by a minimum yearly repayment by each 30 June, worked out under section 109E(6): the balance not repaid at the end of the previous year × the benchmark rate ÷ (1 − (1 ÷ (1 + rate)) ^ remaining term).
A $100,000 7-year loan made in 2025-26 needs $19,715.97 by 30 June 2027; a $500,000 25-year secured loan needs $49,957.64. Any shortfall is treated as a dividend paid to the borrower.
Source: ATO and ITAA 1936 s 109E, checked 25 September 2026.
What is the Division 7A minimum repayment for 2026-27?
At the 8.77% benchmark, a $100,000 7-year loan made in 2025-26 needs $19,715.97 by 30 June 2027.
Minimum repayment 2026-27
$19,715.97
Due by
30 Jun 2027
Benchmark rate
8.77%
Interest over the loan
$38,012
For 2026-27, pay at least $19,715.97 by 30 June 2027 ($8,770 interest, $10,946 principal) on an opening balance of $100,000 with 7 years remaining. Anything less and the shortfall is taxed to you as a dividend.
Paying the loan off with a dividend? The franking credits calculator shows the tax on a franked dividend, and the income tax calculator the tax at your marginal rate.
Last reviewed 25 September 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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Each year's minimum repayment applies the section 109E(6) formula to the balance at the start of the year, using that year's benchmark rate and the remaining term. The schedule assumes the repayment is made on 30 June, so a full year of interest accrues on the opening balance; repaying earlier in the year reduces the interest and the next year's balance.
Benchmark rates are the ATO's published rates for income years ending 30 June 2022 to 2027. Rates for later years are not known until each June, so the schedule carries the 2026-27 rate forward and marks those years as assumed. Rules and rates checked 25 September 2026.
Minimum yearly repayments, year by year
| Year | Rate | Opening | Repayment | Closing |
|---|---|---|---|---|
| 2026-27 | 8.77% | $100,000 | $19,715.97 | $89,054 |
| 2027-28 | 8.77%* | $89,054 | $19,715.97 | $77,148 |
| 2028-29 | 8.77%* | $77,148 | $19,715.97 | $64,198 |
| 2029-30 | 8.77%* | $64,198 | $19,715.97 | $50,112 |
| 2030-31 | 8.77%* | $50,112 | $19,715.97 | $34,791 |
| 2031-32 | 8.77%* | $34,791 | $19,715.97 | $18,126 |
| 2032-33 | 8.77%* | $18,126 | $19,715.97 | $0 |
* Assumed: the 2026-27 rate carried forward. The ATO publishes each year's rate before 1 July.
How to use this calculator
- Enter the loan balance not repaid by the company's lodgment day for the year the loan was made.
- Pick the income year the loan was made in and the term: 7 years unsecured, or 25 years if secured by a registered mortgage.
- Read the minimum repayment due by 30 June each year, split into interest and principal, until the loan is repaid.
❓ Frequently Asked Questions
What is the Division 7A benchmark interest rate for 2026-27?
8.77% for private companies with an income year ending 30 June 2027 — the Reserve Bank's standard variable owner-occupier housing rate published on 5 June 2026. Earlier years: 2025-26 8.37%, 2024-25 8.77%, 2023-24 8.27%, 2022-23 4.77%.
The rate for each year is fixed before the year starts; a later RBA revision does not change it.
How is the Division 7A minimum yearly repayment calculated?
Under section 109E(6) of the Income Tax Assessment Act 1936: the amount of the loan not repaid by the end of the previous income year, multiplied by the current year's benchmark interest rate, divided by 1 minus (1 divided by 1 plus the benchmark rate) to the power of the remaining term. The remaining term is the loan term less the years already elapsed since the end of the year the loan was made, rounded up.
Because the rate is reset every year, the repayment changes each year even on the same loan.
What happens if I don't make the minimum yearly repayment?
The shortfall — the minimum yearly repayment less what was actually paid by 30 June — is treated as a dividend paid to you by the company at the end of that income year, and included in your assessable income (limited to the company's distributable surplus). The loan itself continues.
The Commissioner can disregard it in cases of hardship or honest mistakes in some circumstances.
What makes a Division 7A loan complying?
A written loan agreement signed before the company's lodgment day for the year the loan was made; an interest rate each year of at least the benchmark rate; and a term of no more than 7 years, or 25 years if the whole loan is secured by a registered mortgage over real property worth at least 110% of the loan (after any prior-ranking debts). A loan that is repaid before the lodgment day does not need to be complying.
Do repayments have to be in cash?
No, but they must be genuine. A repayment can be made in cash or by set-off, for example by the company declaring a dividend that is set off against the loan, which is then taxable to you as a dividend.
Some payments are ignored — for instance where you repay the loan and then borrow a similar amount back from the company shortly afterwards (section 109R).
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