Imputation Credit Gross-Up Calculator

When a New Zealand company pays a dividend it can attach imputation credits, which represent company tax already paid on the profit behind that dividend. This Imputation Credit Gross-Up Calculator turns the cash dividend you receive into the gross amount you must declare, shows the credit attached, and estimates the tax you still owe at your marginal rate. You enter the cash dividend paid into your account, the imputation ratio used by the company, and your marginal tax rate. The tool grosses the dividend up by adding the credit, then applies your rate to the gross figure and subtracts the credit to leave the tax to pay. A fully imputed dividend carries a credit of 28 divided by 72 of the cash amount, because company tax is 28 percent, so a $720 cash dividend grosses up to $1,000 with a $280 credit. Investors, shareholders in their own company, and anyone completing an IR3 return use this to check the gross dividend and imputation credit figures on a dividend statement before filing. Good practice is to read the credit straight off the statement rather than assuming full imputation, since not every dividend is fully imputed. Keep every dividend statement so the credits can be claimed, and remember that resident withholding tax of 33 percent on the gross may already have been deducted, which reduces what is left to pay. Higher-rate taxpayers usually owe a top-up, while lower-rate taxpayers may have credits to offset other income. Always confirm your figures against your statement and IRD records.

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Cash dividend received ($)

Imputation ratio (% of full credit)

Your marginal tax rate (%)

$1,000.00

Gross dividend

Imputation credit$280.00

Tax to pay$50.00

Credit = cash x 28/72 x ratio. Gross = cash + credit. Tax to pay = gross x rate - credit. Estimate only, not financial or tax advice.

How it works

The full credit on a fully imputed dividend is the cash amount multiplied by 28 divided by 72, then scaled by the imputation ratio. The gross dividend is the cash plus that credit. Tax to pay is the gross multiplied by your marginal rate, less the credit already attached.

Worked example

A $720 cash dividend that is 100 percent imputed carries a credit of 720 times 28 divided by 72, which is $280. The gross dividend is 720 plus 280, which is $1,000. At a 33 percent marginal rate the tax is $330, and after the $280 credit the tax to pay is $50.00.

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Data sources: the rates and thresholds on this page are maintained against Inland Revenue. Figures are checked twice monthly.

Frequently asked questions

What is an imputation credit?

It is a credit for company tax already paid on the profit behind a dividend. Attaching it stops the same profit being taxed twice, once in the company and again in your hands. You claim the credit against the tax on the grossed-up dividend.

How is the credit on a fully imputed dividend worked out?

Company tax is 28 percent, so a fully imputed dividend carries a credit of 28 divided by 72 of the cash amount. A $720 cash dividend therefore carries a $280 credit and grosses up to $1,000. The ratio shows how much of that full credit is attached.

Will I always have tax to pay on a dividend?

Not always. If your marginal rate is close to the 28 percent company rate the credit may cover most of the tax. Higher-rate taxpayers usually owe a top-up, while lower-rate taxpayers may have surplus credits.