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ETF Investment Calculator Australia — FY 2025-26

Project your ETF portfolio growth with monthly contributions, distribution yield, and franking credits. Calculate tax on distributions including grossed-up amounts and franking offsets. Compare investing via ETF vs salary sacrificing into super. Updated for FY 2025-26 Stage 3 tax cuts.

Project your ETF portfolio growth with distributions and franking credits
$
Lump sum to invest today
$
Regular monthly investment amount
%
Total return including capital growth + distributions
%
Annual distribution as % of portfolio (VAS ~4%, VGS ~2%)
years
How long you plan to hold
Your top tax bracket (determines tax on distributions)
%
% of distributions that are franked (VAS ~70%, VGS ~0%)
—

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How to Use This Calculator

Growth Projection tab

Enter your initial investment, monthly contribution, expected annual return, distribution yield, investment horizon, marginal tax rate, and franking credit rate. The calculator projects your total portfolio value, capital growth, distributions received (after tax), and franking credit refund/offset over the full period.

Tax on Distributions tab

Enter your annual distribution amount, franking percentage, and marginal tax rate. The calculator shows the grossed-up distribution, tax on the grossed-up amount, franking credit offset, and your net tax payable (or refund if your rate is below the company tax rate).

ETF vs Super tab

Enter the amount to invest, years to retirement, marginal tax rate, and expected returns for both super and ETF. The calculator compares final balances, accounting for contributions tax, earnings tax, CGT discount, and distribution tax drag.

Share your result

All inputs are encoded in the URL. Click Share to send your exact calculation to your financial adviser or accountant.

The Formula

Portfolio Growth (with DRP):
Each month: Balance = Balance × (1 + Capital Return Rate) + Monthly Contribution
Each quarter: Distribution = Balance × (Yield / 4), reinvested into portfolio

Franking Credits:
Franking Credit = Franked Distribution × (Company Tax Rate / (1 − Company Tax Rate))
At 30% company tax: Credit = Franked Amount × 30/70

Tax on Distributions:
Grossed-up Distribution = Cash Distribution + Franking Credits
Tax = Grossed-up × Marginal Rate
Net Tax = Tax − Franking Credits
If Net Tax < 0, excess franking credits are refundable

ETF vs Super:
Super: Contribution × (1 − 15%) grown at Return × (1 − 15% earnings tax). Tax-free after 60.
ETF: After-tax dollars, distributions taxed annually, 50% CGT discount on sale (12+ months).

Worked Example

$50K initial + $1K/month, 8% return, 4% yield, 70% franked, 30% marginal, 20 years

Step 1: Portfolio growth

Initial investment$50,000
Monthly contribution$1,000
Total contributions over 20 years$50,000 + $240,000 = $290,000
Projected portfolio (year 20)~$530,000

Step 2: Annual distribution (year 20)

Annual distribution at 4% yield$530,000 × 4% = ~$21,200
Franked portion (70%)$21,200 × 70% = $14,840
Franking credit$14,840 × 30/70 = $6,360

Step 3: Tax on distribution

Grossed-up distribution$21,200 + $6,360 = $27,560
Tax at 30% marginal rate$27,560 × 30% = $8,268
Less franking credit−$6,360
Net tax on distribution$1,908

Verdict: With 70% franking, the effective tax rate on distributions is only ~9% (not 30%). Franking credits significantly reduce the tax drag on Australian equity ETFs like VAS and A200. The $6,360 franking credit offsets most of the tax bill.

ETF Tax Reference Tables (FY 2025-26)

Tax brackets — Australian residents
Taxable Income Rate Tax on This Bracket
$0 – $18,200 0% $0
$18,201 – $45,000 16% $4,288
$45,001 – $135,000 30% $27,000
$135,001 – $190,000 37% $20,350
$190,001+ 45% —

Stage 3 tax cuts applied from 1 July 2024. Plus 2% Medicare levy on taxable income.

Franking credit rates by company type
Company Type Tax Rate Franking Credit per $70 Dividend
Standard company 30% $30 (grossed up to $100)
Base rate entity (turnover < $50M) 25% $23.33 (grossed up to $93.33)

Most large-cap ASX companies pay the 30% rate. ETFs like VAS pass through franking credits from underlying holdings.

Popular AU ETFs — yield and franking
ETF Index Distribution Yield Typical Franking
VAS ASX 300 ~3.5–4.5% ~60–80%
A200 ASX 200 ~3.5–4.5% ~60–80%
VGS MSCI World (ex-AU) ~1.5–2.5% 0% (foreign)
DHHF Diversified (global) ~2–3% ~10–30%
IVV S&P 500 ~1–2% 0% (foreign)

Yields and franking vary year to year. Australian equity ETFs (VAS, A200) have higher franking. International ETFs (VGS, IVV) have zero franking.

ETF distribution components
Component Tax Treatment
Australian dividends (franked) Marginal rate, offset by franking credits
Australian dividends (unfranked) Marginal rate, no offset
Capital gains (discounted) 50% discount if underlying asset held 12+ months
Foreign income Marginal rate, may include foreign income tax offset (FITO)
AMIT cost base adjustment Reduces/increases cost base of units (affects future CGT)

Check your AMMA (Annual Member Statement) for the breakdown. Pre-fill from ATO is available from mid-July.

FAQ

Yes. When you sell ETF units, you trigger a CGT event. The capital gain is the sale price minus your cost base (purchase price + brokerage + any AMIT cost base adjustments). If you held the units for more than 12 months, individuals receive a 50% CGT discount — only half the gain is added to your taxable income. If you used DRP, each reinvestment creates a separate parcel with its own cost base and acquisition date. Use the FIFO (first in, first out) or specific identification method to determine which parcels you are selling.
If your marginal tax rate is below the company tax rate (30%), excess franking credits are fully refundable. For example, if your total taxable income (including grossed-up dividends) falls below $18,200 (the tax-free threshold), you pay zero tax but still receive the full franking credits as a cash refund from the ATO. This makes Australian equity ETFs like VAS particularly tax-efficient for retirees, part-time workers, and anyone in the lower tax brackets. Self-managed super funds in pension phase (zero tax rate) also receive full franking credit refunds.
ETFs (Exchange Traded Funds) are trusts that pass through all income and capital gains to investors each year. LICs (Listed Investment Companies) are companies that pay company tax on profits and distribute dividends with franking credits. Key differences: ETFs distribute capital gains directly (you get the 50% CGT discount), while LICs pay dividends (fully franked at company rate). LICs can smooth distributions and retain profits, while ETFs must pass through all income. For most investors, the tax treatment is similar, but ETFs are more transparent and have lower costs.
Tax-wise, there is no difference — DRP distributions are taxable in the year received, just like cash distributions. DRP is convenient for automatic reinvestment without brokerage fees, but creates many small parcels that complicate CGT calculations when you sell. Taking cash gives you more control — you can reinvest across different ETFs for diversification, or use the cash for expenses. Many investors prefer cash distributions so they can manually reinvest and maintain cleaner tax records. If you do use DRP, keep meticulous records of every reinvestment for CGT purposes.
ETF income is declared using the AMMA statement (Annual Member Managed Account Statement) provided by the ETF issuer, usually available from July. The ATO also pre-fills ETF distribution data in myTax from mid-to-late July. You declare: Australian franked dividends (Item 11), franking credits (Item 11), foreign income and FITO (Item 20), and capital gains (Item 18). AMIT cost base adjustments are not income — they adjust your cost base for future CGT. If you sold ETF units during the year, you also need to calculate and declare any capital gain or loss.

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