The Finance Algorithm

Dividend Income Calculator

Calculate how much passive income you can generate from dividend-paying shares and ETFs.

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$200k

Total value of your dividend-paying investments

%
4.5%

ASX 200 ~3.3%, high-yield ETFs (VHY) 5-6%, global shares ~2%

%
70%

Aussie shares avg ~70% franked. Global = 0%

%
0%

0% = take all as income, 100% = full DRP

%
30%

Your tax rate on the next dollar of income for 2026-27: 0% up to $18,200, then 15%, 30%, 37% or 45%, plus the 2% Medicare levy if it applies

10y

See how dividend income compounds over time

%

An assumption for the projection - prices can fall as well as rise

The button asks our AI to explain these figures in words.

Your dividend income

Gross dividends/yr

$9,000

After-tax income

$8,190

4.09% effective yield

Franking credits

$2,700

offsets your tax

Net tax

$810

Cash, reinvested dividends and tax, or a refund

Australian franking credits often turn an apparent tax bill into a refund at low marginal rates.

$9,000gross dividends
Cash to you91.0%
Tax9.0%

Annual cash income over 10 years

Assumes the shares grow 4% a year, plus the share of dividends you reinvest.

$0k$3k$6k$9k$12kYr 1Yr 3Yr 5Yr 6Yr 8Yr 10

Underlying portfolio value year by year

Reaches $296,049 after 10 years.

$0k$74k$148k$222k$296kYr 1Yr 3Yr 5Yr 6Yr 8Yr 10
Over the 10-year projection you'd pocket $98,330 in cash dividends and end with a portfolio of $296,049. Dividend yields can drop in recessions: diversify across sectors and look for dividend-growth companies, not just the highest yield.

How it works

Dividends are the share of profits a company pays out to its shareholders. In Australia, franking credits make them worth more than the cash amount to many investors, because the company has already paid tax on them. Put in your portfolio, its yield and your tax rate to see what it would pay you after tax each year, and how that could grow.

  1. 1Enter the total value of your dividend-paying investments.
  2. 2Set the average dividend yield across your portfolio.
  3. 3Enter the share of the dividends that are franked - your dividend statements show it.
  4. 4Choose how much to reinvest vs take as cash income.
  5. 5Enter your marginal tax rate for after-tax income calculations.

Worked examples

Passive Income in Retirement

Helen has a $600,000 share portfolio yielding 4.5%, 80% franked, and takes the dividends as cash. With seniors' offsets her income stays under the tax-free threshold, so her marginal rate is 0%.

Portfolio value
$600,000
Average dividend yield
4.5%
Average franking rate
80%
Percentage to reinvest
0%
Marginal tax rate
0%
Projection period (years)
10
Share price growth (% a year)
4%

Helen receives $27,000 of dividends a year. The franking credits attached are worth $9,257, and with no tax to pay they're refunded, so her income is $36,257 - 6.0% of the portfolio.

Reinvesting for Growth

Marcus earns $90,000 (30% marginal rate plus the 2% Medicare levy) and has a $150,000 portfolio yielding 4%, 80% franked. He reinvests all dividends and assumes 6% price growth.

Portfolio value
$150,000
Average dividend yield
4%
Average franking rate
80%
Percentage to reinvest
100%
Marginal tax rate
32%
Projection period (years)
15
Share price growth (% a year)
6%

This year's $6,000 of dividends carry $2,057 of franking credits, leaving $521 of tax to pay and $5,479 to reinvest. On these assumptions the portfolio reaches about $597,500 after 15 years, paying about $21,800 a year in dividends.

Questions people ask

What are franking credits?
Franking credits (or imputation credits) represent tax the company has already paid on its profits. When you receive a fully franked dividend, you get a tax credit for the 30% company tax already paid. If your marginal tax rate is below 30%, you receive the difference as a refund. This system prevents double taxation and makes Australian dividends globally unique.
How much do I need to live off dividends?
At a 4.5% yield: for $50,000/year in dividends, you need ~$1.1M invested. For $40,000/year, ~$890,000. For $30,000/year, ~$670,000. With franking credits at low tax rates, the effective yield is higher, so you may need less. These are pre-tax estimates: your actual needs depend on your tax situation.
When are dividends paid?
Most listed Australian companies pay twice a year - an interim and a final dividend - and some pay quarterly. To receive a dividend you must own the shares before the ex-dividend date.

The terms, in plain English

Dividend Yield
The annual dividend per share divided by the share price, expressed as a percentage. A $100 share paying $4/year in dividends has a 4% yield.
Franking Credit
A tax credit attached to dividends representing company tax already paid. Fully franked = 30% credit. Reduces your personal tax or results in a refund.
Ex-Dividend Date
The cutoff date for dividend eligibility. You must own shares before this date to receive the upcoming dividend payment.
DRP (Dividend Reinvestment Plan)
A plan that automatically uses your dividends to buy more shares, often at a small discount and without brokerage fees.

Official sources

ETF Returns Calculator

Compare total returns (capital + dividends) across ETF types.

Compound Interest Calculator

See how reinvested dividends compound your wealth over time.

Net Worth Calculator

Get a complete picture of your financial position.