$100,000 Division 7A Loan Repayment Example
Minimum yearly repayment on a $100,000 previous year-end balance for 2026-27, using the ATO-published 8.77% benchmark rate.
| Previous year-end balance | $100,000 |
|---|---|
| Loan type | Unsecured |
| Remaining term used | 6 years |
| Benchmark rate | 8.77% |
| Minimum yearly repayment | $22,139 |
At $100,000, this is a mid-sized Division 7A loan — missing the $22,139 minimum repayment would expose the shortfall to deemed-dividend treatment at the shareholder's marginal rate.
If the $22,139 minimum repayment is missed, the shortfall can become an unfranked deemed dividend taxed at the shareholder's marginal rate — up to $10,405 of extra tax at the top 47% rate on this year's repayment alone, with no franking credit to offset it.
A Division 7A loan can arise when a private company lends to a shareholder or associate. This example calculates only the 2026-27 MYR; future MYRs cannot be known until the ATO publishes each future benchmark rate.
Division 7A requires the minimum repayment to be made by 30 June each year. If the repayment is missed, the shortfall can be treated as an unfranked deemed dividend rather than a simple loan shortfall.
Compare nearby loan sizes: $50,000, $100,000, $200,000, and $500,000. Need a custom result? Use the Division 7A Calculator to change the loan amount, loan type, and financial year.