This is AccountKit’s help article for the Division 7A tool. It calculates the interest and minimum yearly repayments on every client’s Division 7A loans in one place, and when the client is connected to Xero it reconciles the schedule with the ledger before posting the journals. See what the Division 7A tool does, or read our guide to Division 7A loans for this year’s benchmark rate and a worked minimum-repayment example.
Overview
The purpose of this tool is to calculate the minimum repayments and associated interest regarding any client's Division 7A Loans in a simple, easy to use format, collating all Div7A loans together in one place.
When you connect your AccountKit to a cloud accounting package (e.g. Xero), you can reconcile the calculation schedule with your ledger before posting the applicable journals for interest and dividends each year.
This tool applies to Australian tax practices ONLY. It is not available for UK, NZ or US regions.
Here's a short video to give you a feel for how the Division 7A Tool works, before you dive in all the details of this tool.
We do not carry out any checks as to the status of a Division 7A loan. It is assumed that you have reviewed the circumstances of the loan in question in line with legislation and ATO guidance. This calculator simply calculates the minimum repayments and associated interest and prepares the applicable journals, all on the assumption that you have done the appropriate research and come to your own conclusions as to the status of any loan.
Please Note: at this point, we don't support any of the options under a sub-trust arrangement.
For more information on Division 7A, please see this link: ATO - Division 7A - Loans.
The Division 7A List Page
1. Add new Division 7A Schedule
Select this to start the process of creating a brand new Division 7A schedule.
2. Balance at
Balance at: selecting this updates the balance of the schedules within the table below so you can see what the balances are meant to be at the end of the selected financial year. It defaults to the last completed financial year.
3. Group by, Filter by, View Select, List Actions menu (three-dot icon)
These are part of Menus & Shared Elements used across AccountKit. For Group by, Filter by and View Select, see Standard Views & Filters.
Click on the List Actions menu (three-dot icon) to export the list to Excel, get a summary report or a movement report for a specific client and date range.
4. The list...
This is a snapshot of all current Division 7A Schedules running within your practice and their current status.
Checkbox - enables you to select multiple schedules to delete, archive, unarchive or post bulk journals.
Client - this is the client entity that the Div7A loan belongs to.
Description - this is a free text field in the event you would like to enter a basic description as to how the loan came into existence or any other useful information (optional).
Summary - this opens up in the summary tab for the selected company.
Year of Loan - identifies the year the loan was established.
Establishing Balance - this is the original establishing balance for the loan.
Type & Term - identifies the applicable type (secured vs unsecured) and applicable duration of the loan.
Balance - identifies the expected balance as at the end of the selected "Balance at" financial year.
Status - this identifies whether the Xero ledger is in balance with the calculation worksheet for the selected "Balance at" financial year.
5. Actions Column
These are the actions available to you for each Division 7A schedule line.
Link - allows you to link to that schedule to a file or folder, and to add a link to a web address.
Row Actions menu (three-dot icon) - appears on mouseover at the end of the row, and allows you to Export, Archive or Delete that schedule.
General Variables & Input Fields
The Setup & Settings Area
1. Client & Loan Details
This area appears upon setup and when you select the "Edit Settings" option in the Actions menu (cogwheel):
Client Name - this is the client entity that the Div7A loan belongs to.
Sync with Xero? - ticking this box gives you the option to reconcile the calculation schedule with the Xero ledger and post journals for dividend and interest into Xero. It's only available for clients with a Xero file connected to AccountKit.
Refresh Accounts List - forces a refresh of the chart of accounts from Xero.
Year of Loan - identifies the year the loan was established.
Type - the applicable type (secured vs unsecured) and duration of the loan.
Description - a free text field to enter a basic description as to how the loan came into existence or any other useful information (optional).
Account Selection - only applicable where "Sync with Xero?" is selected. You choose the default accounts for the loan's balance sheet, interest and dividend accounts.
Establishing Balance - the original establishing balance for the loan. You can enter the conversion balance here if you wish, then don't edit the years prior to the conversion balance on the next screen.
Conversion Year - identifies which year you would like AccountKit to commence calculating the minimum repayments and dividends, typically the end of the last financial year.
Dividend Default Date - defines the default date for the dividend. This can be overwritten at the point of preparing the journal from the summary tab.
2. Copy link, Actions, Right Pane, Minimise or Close
These are part of Viewing & Editing Schedules.
3. Shared Tool Bar
This Shared Tool Bar is also part of the Shared Elements used across AccountKit.
The Summary Tab
The summary tab highlights all the relevant details for all current Division 7A loans across your clients' private companies. It also provides an opportunity to post entries to Xero to reconcile the calculation work paper with the Xero ledger.
1. Company Name
Identifies the current company name that the Division 7A schedule belongs to.
2. Compare balance at...
This drop-down enables you to select which year the schedules are checking the status of, in or out of balance, within the table.
By default, it'll use the last completed financial year.
This is ONLY available when the loan is synched to Xero.
3. Loan Tabs
The tabs available in this view are broken into two distinct areas:
<- & -> Arrows - where you have lots of schedules, this enables you to scroll left and right between schedules off-screen. Holding the <Shift> key whilst scrolling the mouse will scroll left and right.
(+) Icon - add a new Division 7A schedule without having to return to the list page.
Summary tab - this tab is an overview of all the current Division 7A loans available, including balances, interest and repayments. When working in this tab, you can also post your interest and dividend journals.
Year tabs (e.g. 2026/27) - each tab includes the details for each of the Division 7A loans, including the breakdown by financial year for interest and repayments. This is where the majority of your work will be, in accounting for repayments and reconciling the calculation schedule with your ledger.
Description Icon - hover over this icon to see the description for the highlighted loan.
4. Show forecasted values
By selecting this option, for future years where there isn't yet a benchmark interest rate, we will project potential interest and dividends based on the last released rate. Jump to Forecasting future values for more info.
5. Financial Year
This column identifies the applicable financial year, followed by the associated benchmark interest rate for the financial year.
Next to the financial year, you will find options to edit dividend allocations (cogwheel icon) and to post the journal to Xero (paper plane icon).
Edit dividend allocations - selecting this will enable you to increase the dividends above the minimum mandatory repayment and identify where to allocate the extra credit. Only available where the years journals are ready to post (e.g. green plane icon).
Post Journal - when ready to post, press this to preview the final journal before posting to Xero. Below are the different options you can get.
represents a prior year that has already been posted. This means it's inactive and unable to be edited or voided, since there are posted entries in future years.
this means a journal has already been posted and it's available for voiding, should you want to go back and edit the entry.
the orange icon represents a current year journal that is not ready for posting, due to issues still requiring to be fixed - e.g. debits against the loan account.
the green plane indicates that the years' journals are now ready to be posted.
6. Total
This column identifies the total values of:
Voluntary Repayments - this is the application of any credits applied throughout the year, that reduced the minimum repayment required.
Dividends Issued - this is the balance of the credits applied to meet the minimum repayment required, plus any top-up to the dividend entered.
Interest - identifies the interest accrued on the account for that financial year.
Balance - the expected balance at the end of the applicable financial year.
7. Year of Loan
Here you can see the opening balance of the loan, its status (e.g. Completed, Not Connected etc), in balance or out of balance for the last completed financial year.
You can then see the total voluntary repayments, dividends issued, interest and closing balance by financial year.
Note that if a cell is orange, it has issues to be resolved before you can post the journal. Click on it to open the details.
8. Right Pane, Minimise or Close
These are part of Shared Elements.
9. Shared Tool Bar
This Shared Tool Bar is also part of the Shared Elements used across AccountKit.
The Loan Details Tab
These tabs represent each of the loans currently at play for the currently selected company.
1. Financial Years
Each year for the currently selected loan schedule is listed below, showing a high-level overview for each financial year.
Year 0 is the establishing year - when connected to Xero, you can expand this to see the transactions that create the establishing entry.
Year 1 is the first year where repayments are required - the primary difference to any other year is the Lodgement Date option, which alters the minimum repayment calculations based on payments made prior to this date. Key elements include:
The date represents: a private company's lodgement day is the earlier of the due date for lodgement, or the actual date of lodgement of the private company's income tax return for the income year.
How is the date populated: based on the due date within the client detail page. If that is blank, we will populate it with May 15 of the relevant year.
Either way, YOU MUST REVIEW THIS DATE, as it will materially impact the minimum repayment due this year.
Please note that this feature was added as of May 8, 2021, and so will only appear on schedules created after this date. Previously this was something you had to handle manually.
Year 2 onwards - shows high-level values for each respective year. Each of these years can be expanded to show the calculation schedule and Xero ledger (if synched with Xero).
Period - represents the financial year detail.
Benchmark Interest Rate - identifies the ATO defined benchmark interest rate for that year. Where this has yet to be established, it won't show any details.
Minimum Repayment - this is the minimum repayment required under legislation. It does not identify what has actually been paid, just the mandatory minimum.
Repayments - identifies the actual repayments made for that year. By default, it will initially show the minimum required, but will update as further repayments are added.
Total Interest & Rounding - shows the total interest accumulated on the loan at benchmark interest rates. Note that we round this number down.
Closing Balance - this takes the prior period's closing balance and subtracts the payments, then adds the interest to establish the closing balance for the year.
Calculate Pay Out - utilise this to quickly calculate a payout value as at a specific date. This is useful for when you have a credit that needs to be applied across multiple loans as at a specific date, but first need to know how much to journal to the loan, allowing for interest.
As you work through the Xero Ledger details, you will see a status for each year (in the centre of each year section), that gives you a current status for each period.
Xero Ledger Issues to be resolved - until all the transactions in the Xero ledger have been re-allocated or allocated to the calculation schedule, you will receive this notification.
Schedule ready to post - will appear once all the Xero ledger transactions have been dealt with.
Journals posted - the journals have already been posted.
2. Calculation Schedule
This is where we carry out the detailed interest and minimum dividend calculations, after bringing to account any repayments on the applicable loan.
Where not synced with Xero - use the +Add new repayment or adjustment (at the bottom of the Calculation Schedule) repayment option to add in repayments manually.
Where synced with Xero - allocate payments from the Xero Ledger area into the calculation schedule (see below).
3. The Xero Ledger
This area only appears where "Sync with Xero" is selected in the setup. It represents a transaction listing from Xero for the applicable loan account over the financial year.
The aim for this area is to align the Xero ledger with the calculation schedule above.
Opening Balance - if red , the prior years in AccountKit either need to be tweaked to match Xero OR Xero needs to be updated to reflect the schedule. These need to match before the figures are finalised and any journals are posted since it'll change the interest and minimum repayment figures.
Debit Column - the debits shouldn't exist in a prior year loan. Click on them to be taken into Xero to reassign them to a current year loan. Upon returning, the accounts will be refreshed.
Credit Column - the credits can either be re-assigned to another account by clicking through to Xero OR can be used as repayment in the current year by selecting the green double arrow icon, in the Actions column. You'll be given two options:
Assign as single payment: Use this option to assign the single credit up to the calculation schedule after which the interest and minimum repayments are re-calculated. Adjust the current payment entries. Use this option to update the payment figures.
Split and assign as multiple payments: Use this option to split a single payment to multiple payments across multiple dates within the calculation schedule. Useful for when you have a net figure journaled in, but you need to break this down to multiple repayments for calculating interest correctly.
Upon completing all entries, including posting the final interest and dividend journals, the out-of-balance section will be zero.
4. Copy link, Actions, Right Pane, Minimise or Close
These are part of Viewing & Editing Schedules.
5. Shared Tool Bar
This Shared Tool Bar is also part of the Shared Elements used across AccountKit.
Please note that as of 24 August 2026, new Division 7A schedules calculate interest on a net-of-GST basis. Schedules created before this date continue to use the previous gross basis.
Before you Start
So you can get through the process of setting up your Division 7A schedules in one efficient sitting, there are some pointers to be aware of, and some steps to follow before commencing the process.
Useful Pointers
Before you start exploring this tool any further, it's useful to be aware of a few other very important elements, as follows:
The loans are assumed to be built and administered from within the company itself, not from the recipient of the loan (e.g. if there's a trust with a bucket company, these loans must be created and attached to the bucket company and not the trust).
Every new year's loan must be in their own account - e.g. you can't have a single amalgamated loan balance.
Practice Settings
Review your practice settings to ensure the default settings for the Division 7A reflect how you'd like to process the entries into Xero.
Your Name > Practice Settings > Tool Settings > Compliance > Division 7A Tool
Show interest and dividend journals on cash basis reports
Enables you to define whether any interest and dividend journals posted from within the tool are to show on cash basis reports or not. You can also amend the Projected Division 7A rate manually, if you wish.
Note that the Division 7A Tool settings can be overwritten on a per schedule basis under the Actions > Settings menu option, in the schedule.
Prepare the entities you plan to reconcile
Check the setup in your accounting software (e.g. Xero) - check the applicable dividend, interest received and loan account within your accounting software, setting these up as required.
Ensure your accounting software is connected - if the client has an online accounting package like Xero, firstly check and make sure you've connected them to AccountKit, by going to the applicable client page. Then click on the Xero blue Integration icon to prompt the pop-up to connect and initiate the process of downloading the client data into AccountKit.
Until this process has finished, you won't be able to initiate any connected tools for that client - you will be notified once complete.
Check out this Xero Connection article for more details about connecting and disconnecting from Xero.
Prior Year Schedules - ensure you have on hand any historical Division 7A schedules, as we will establish them first.
Date Last Reconciled - if it's a pre-existing Division 7A schedule from prior years, identify the date the account was last reconciled, and AccountKit will start calculating and posting entries from this date.
How to create a Division 7A schedule
Non-connected Division 7A schedule
Where you're not looking to post your interest or dividend journals directly into Xero, follow these steps to build your schedule.
Add New - from the list page, select the sign to " Add a new schedule ".
Schedule details - fill in the basic details, skipping the " Sync with Xero " option should it appear. The fields are relatively self-explanatory but check the description of each one in the Setup & settings area section of this article, for a more detailed explanation of each area. Once you complete this first section, click on Continue to start building the schedule.
Set Conversion Year (if relevant)
If you want AccountKit to pick up calculating from a specific year, set the conversion year in settings.
Please Note: we do not check your prior-year calculations and assume you have calculated the appropriate amounts.
Manually add in repayments from throughout the year
Expand the applicable year.
Add any repayments already made throughout the year to have the calculator re-calculate the interest and minimum repayments.
Work your way through each of the company Div7A schedules to get them all up to date.
Head to the Summary Tab and review the final dividend / interest outcome for the year.
Finalise the financial year
If you're happy with the outcome, simply copy the total figures into a journal and post.
If you would like to increase the dividend (e.g. to round it up) or change the date of posting for the dividend, simply press the icon and edit the applicable figures until you have the desired dividend, and enter the updated journal amount into your ledger software.
The icon enables you to automatically calculate and enter the payout figure for the loan, taking into account any interest calculations pending the timing of the loan.
Once done with your journals, output the Excel reports as your workpaper.
Connected Division 7A schedule
Follow this process when you wish to calculate and post your interest and dividend entries direct into Xero, reconciling the ledger account as you go.
Basic setup - follow the same setup steps as above, except that this time you will select the option to " Sync with Xero " to enable the accounts you will be posting to. Select the required accounts as follows:
Balance Sheet Account - the balance sheet account belonging to the loan.
Interest Received Account - represents the location of the interest received on the Div7A loan in question.
Dividend Account - identifies the account you want AccountKit to post the journal entry to as part of the year figures.
Press Continue to build the schedule.
Review the Xero general ledger
Debits - there shouldn't be any debits assigned to a prior year Division 7A loan (except for accrual of interest in a moment). Simply select the transaction to open it in Xero, edit the entry to allocate it elsewhere, then close the window to have it re-calculate the interest / repayments for the year.
Credits - these are allowed, but if you would like to allocate them elsewhere, select the transaction and re-allocate it in Xero before returning. They will then be cleared from the schedules. The alternate option is to select the " assign as repayment " icon, to copy it into the repayment schedule, after which the interest / repayment will then be recalculated.
At this point, you should only be out of balance by the net interest / repayment amount.
Review all schedules
Expand each of the loans for the applicable financial year.
Follow the same process addressing any debits or credits within the Xero ledger.
Once done, head to the Summary Tab and review the final dividend / interest outcome for the year.
Finalise the entries
If you're happy with the outcome, simply press the green paper plane icon to review a preview of the journal before posting.
If you would like to increase the dividend (e.g. to round it up), simply press the icon and increase the applicable year's final dividend until you're happy with it.
Utilise the icon to automatically calculate and enter the payout figure for the loan taking into account any interest calculations pending the timing of the dividend date.
Then preview and post the updated journal amount into your ledger software, utilising the paper plane icon.
Output Reports
Once done with your journals, output a report as verification from the Actions row menu.
Other Functions & Options
Forecasting future values
It's sometimes helpful to be able to see an estimate of future dividends and interest so you can play around with the outcomes. You can do this by toggling on the "Show forecasted values" toggle.
What happens when I toggle it on?
We will utilise the last released Benchmark rate and project that to future years for ALL schedules.
We draw a line for each schedule and the summary tab to make it clear where the projections start.
You can then edit dividends for each of those years.
What happens when I toggle it off?
Any customisations to the dividends will be lost.
Please note that the Division 7A Summary and Movement reports do not display any of the forecasted values, and you cannot post any of the forecasted values into Xero.
How to remove a payment from the calculation schedule
Where not synced with Xero - simply click on the cross at the end of the repayment line in the calculation schedule.
Where synced with Xero - you will need to delete the payment from the Xero Ledger area. Where a single payment is split, all splits will be removed from the calculation schedule.
How to void a journal
Simply select the paper plane icon (which turns green upon hovering) and choose "Select to void".
How to refresh your Xero transactions
In the event you need to refresh your Xero transactions - e.g. there's been a change that needs to be accounted for - simply select the blue Xero icon and click on Refresh Xero data.
What if my prior year's interest has changed?
This is a rare occurrence that has surfaced in the past for some schedules created in the tool's earliest release.
How do I fix it?
Unfortunately, there's no super quick fix but ultimately should only take a minute per schedule to get back to a workable state once again. In this instance, here are the steps you can follow:
Collate an export of the reports as at the point you last prepared entries and reconciled your Inter-Entity loans.
Update the description of all the loans you need to replace with something like "OLD" so you can tell at a glance which schedules were the original ones.
Recreate each of the schedules using the same details as you had originally used to create the first set of loans in the first place, BUT set the conversion year to the year you had last completed in AccountKit (e.g. if you previously had a conversion year of 2017/18 and used AccountKit to calculate figures for 2018/19, then you would use 2018/19 as your conversion year).
Enter the pre-conversion year values like before, including the first AccountKit year values, and make sure the values after entering match your closing balance as of that year (if connected to Xero, your opening balances in the calculation schedule should now match).
Lastly, go ahead as normal and complete the next year's Division 7A calculations.
That's it - you should now be back up and running once again.
Related Links
This support article covers all the menus and shared elements used throughout AccountKit
Learn how to connect and manage your DMS
Head here to understand how the Xero Connection is setup and associated statuses along with troubleshooting issues such as locked periods.
Not using AccountKit yet? Try the Division 7A tool on one client group’s loans. You can start a 14-day free trial or book a demo.