How Does Tax on Dividends Work?

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If you’re a company shareholder, you may receive payments known as “dividends”. These payments represent your share of the company’s profits and are like a “reward” for investing in the business.

Dividends may be a great way to boost your income and are often considered tax-effective.

But how do they work?

There are many rules and conditions involved with dividends, especially when it comes to tax. Watch this video to find out more!

CHAPTERS:
00:00 - Intro
00:23 - How do dividends work?
01:04 - Company will pay a dividend once or twice a year
02:33 - Franked dividends
03:07 - Franked dividend example
04:30 - Franking credits
05:11 - Shareholders on reinvesting their dividends
05:48 - Make sure to declare and submit your tax file number (TFN)
06:16 - Final thoughts

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Davie has over 10 years experience in advising businesses in management accounting and taxation issues. He heads up a passionate team at Box Advisory Group who are dedicated to offering proactive and outstanding service to our clients.

Davie’s extensive experience in providing tax and consulting advice and astute business knowledge has paved the way for success for many businesses.

He is a member of the Chartered Accountants Australian and New Zealand, a member of the Australian Tax Practitioners Board and holds a Bachelor of Commerce degree from the University of New South Wales.

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DISCLAIMER: Please note that every effort has been made to ensure that the information provided in this video is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.

Video produced by Social Wave