Division 7A minimum yearly repayment calculator
The minimum yearly repayment is (P x I) / (1 - (1/(1+I))^T), where P is the balance not repaid at the end of last year, I the benchmark rate and T the remaining term. A $100,000 7-year loan made in 2025-26 needs $19,716 in 2026-27 at 8.77%.
Enter the loan details and the income year, and the calculator works out the minimum yearly repayment (MYR) a borrower needs to pay a private company during that year to keep a complying Division 7A loan from creating a deemed dividend. If you add the repayments made during the year, it also shows interest at the benchmark rate, the closing balance and any shortfall.
General information only, not legal or tax advice. Check the current rules against the source before relying on this. Reviewed 18 October 2026.
What you enter
- Income year for the MYR. Rates are loaded for 2021-22 to 2026-27.
- Loan term: 7 years (unsecured) or 25 years (secured by a registered mortgage meeting the 110% test), or a shorter actual term.
- Either the opening balance (the amount not repaid at the end of the previous year) and the year the loan was made, or the original loan amount, the year it was made and any repayments made before the lodgment day for that year.
- Optional: the date and amount of each repayment during the chosen year.
How it works
The calculator uses the formula in s 109E(6) of the ITAA 1936 as the ATO sets it out:
MYR = (P × I) ÷ (1 − (1 ÷ (1 + I))T)
P is the balance not repaid at the end of the previous year, I is the benchmark interest rate for the chosen year, and T is the remaining term in whole years. For the first year after the loan is made, P is the loan less repayments made before the lodgment day of the year the loan was made. Interest is worked out daily at the benchmark rate on the balance from time to time, as in the ATO's worked example.
| Income year | Benchmark rate |
|---|---|
| 2026-27 | 8.77% |
| 2025-26 | 8.37% |
| 2024-25 | 8.77% |
| 2023-24 | 8.27% |
| 2022-23 | 4.77% |
| 2021-22 | 4.52% |
Example
A $100,000 unsecured 7-year loan made in 2025-26 with nothing repaid before lodgment day has a 2026-27 MYR of $19,716. The same loan on a 25-year secured term needs $9,992.
Limits
- 30 June year ends only. A substituted accounting period uses a different rate.
- It does not test whether the loan is complying, whether s 109R disregards a repayment, or whether a UPE is a loan.
- It does not calculate distributable surplus, so a shortfall is shown before any s 109Y cap.
- Future years cannot be calculated until the ATO publishes the benchmark rate, just before the year starts.
- Interest and closing balance match the agreement only if the agreement charges the benchmark rate.
The ATO publishes its own Division 7A calculator and decision tool. For the rules behind the numbers, read the Division 7A guide.
Questions
Does this match the ATO's calculator?
It uses the same formula and the daily interest method shown in the ATO's worked example, and the formula has been tested against the ATO's published results of $9,835 and $10,079. Check results against the ATO tool for anything material.
Can I calculate 2027-28?
Not yet. The benchmark rate for a year is the RBA rate last published before the year starts, so the ATO publishes it just before 1 July.
Is the MYR rounded?
The calculator rounds to the nearest dollar, as the ATO's worked example does. Paying a little more than the figure shown avoids any rounding shortfall.
Sources
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