Finance Lab
Division 7A minimum yearly repayment
Work out the minimum yearly repayment on a complying loan from your company, and what it costs you in cash.
Minimum yearly repayment = opening balance ÷ the present-value factor for the remaining term at the benchmark rate you entered. Interest for the year = opening balance × benchmark rate. Principal repaid = repayment − interest.
Step 1 · Enter your figures
Every box starts with an example figure. Replace each one with your own — the result updates as you type. Nothing you type is sent anywhere or stored.
The amount owed to the company at the start of this income year.
The benchmark rate for this income year, taken from the current published rate. Enter it yourself — nothing is assumed.
Years left in the maximum term of the complying loan agreement.
Your own marginal rate, used only to show the pre-tax income needed to fund the repayment.
Step 2 · Read the result
Minimum yearly repayment
$21,632
The least you must repay this income year for the loan to stay complying.
- Interest in the repayment
- $8,000
- Principal in the repayment
- $13,632
- Balance after the repayment
- $86,368
- Pre-tax income needed to fund it
- $39,330Repayments are made from money you have already paid tax on at the marginal rate you entered.
- Interest in the repayment$8,000
- Principal in the repayment$13,632
- Balance after the repayment$86,368
- Pre-tax income needed to fund it$39,330
What this answer rests on (8)
- Loan balance at the start of the year$100,000
You entered this
The amount owed to the company at the start of this income year.
- Benchmark interest rate8.0%
You entered this
The benchmark rate for this income year, taken from the current published rate. Enter it yourself — nothing is assumed.
- Years remaining on the loan6.0 years
You entered this
Years left in the maximum term of the complying loan agreement.
- Your marginal tax rate45.0%
You entered this
Your own marginal rate, used only to show the pre-tax income needed to fund the repayment.
- The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
The calculator applied this
- The loan is treated as a complying loan repaid in equal yearly amounts over the remaining term.
The calculator applied this
- One repayment is made for the year. Repayments made monthly or quarterly change the interest slightly.
The calculator applied this
- This is arithmetic on the figures you entered, not tax advice. Confirm your position with your accountant.
The calculator applied this
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Save to my workspaceWhat this means for you
What you must repay the company this year to keep a loan from it complying, and what that repayment really costs you in earned income.
How to read it
- The minimum repayment is the floor, not the target. Paying more reduces next year's interest.
- Only the principal part reduces the balance; the interest part is income to the company.
- The pre-tax income figure is the honest one — that is what you must earn personally to fund the repayment.
Watch out for
- Missing the repayment date. A shortfall can be treated as a dividend for the whole amount.
- Using last year's benchmark rate. It is reset each income year.
- Drawing more from the company during the year and quietly rebuilding the balance you just repaid.
Assumptions behind this result
- The rate you entered is the one applied. No rate, threshold or statutory figure is supplied by the platform — confirm it from the current published source before you rely on the result.
- The loan is treated as a complying loan repaid in equal yearly amounts over the remaining term.
- One repayment is made for the year. Repayments made monthly or quarterly change the interest slightly.
- This is arithmetic on the figures you entered, not tax advice. Confirm your position with your accountant.
General information only. This calculator does not take your circumstances into account and is not financial, tax, legal or investment advice. Confirm every rate, threshold and figure with your own adviser before acting.
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Take this further
Members run this calculator on their own recorded figures, save the workings to their workspace, export them to Word or Excel, and read the lessons that teach the thinking behind the result.