Invest as an Individual or through a Company?
You have a surplus to invest. Hold it in your own name and you pay tax up front but get an indexed cost base at sale; run it through a company and more goes in, but the gain is taxed twice on the way back out. Compare the after-tax outcomes — change any number to recalculate instantly.
Invest as an individual
after all tax, in your hands
Invest through a company
after all tax, in your hands
| Tax on the surplus at entry | $376,000 | |
| Net amount invested | $424,000 | |
| Value at sale | $834,072 | |
| Gain above the indexed cost base ($569,821) | $264,252 | |
| CGT at 47.0% | $124,198 |
| Company tax on the surplus at entry | $200,000 | |
| Net amount invested | $600,000 | |
| Value at sale | $1,180,291 | |
| Company CGT at 30% (no indexation) | $580,291 | $174,087 |
| Franking credit on the distribution | $174,087 | |
| Top-up tax when paid out to you | $380,649 |
⚑ Worth knowing
Company capital gains are taxed at 30% in this comparison regardless of the company tax rate entered — the entered rate applies to the invested surplus only.
Personal tax is estimated on resident marginal rates with the low income tax offset plus 2% Medicare levy. The individual’s gain uses a CPI-indexed cost base with a 30% minimum rate; the company’s sale proceeds are distributed as a fully franked dividend. Based on assumptions entered.
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How the comparison works
- 1
Tax on the way in
Investing personally, the surplus is taxed at your marginal rates first, so less goes in. Through a company, only the company rate (25% for base rate entities, 30% otherwise) comes off the top — more capital starts working.
- 2
The same growth, two cost bases
Both paths grow at your estimated rate for the years you choose. At sale, the individual's cost base has been uplifted by CPI — only above-inflation growth is taxed — while the company gets no indexation.
- 3
Capital gains tax at sale
The individual's indexed gain is taxed at the incremental personal rate with a 30% minimum. The company's full gain is taxed at 30% in this comparison, regardless of the entry rate.
- 4
Getting the money out of the company
The company's after-tax proceeds come out as a fully franked dividend. Franking credits offset personal tax on the distribution; anything above the credit is top-up tax, and excess credits are treated as lost. The verdict compares what lands in your hands, based on the assumptions entered.
Worked example: $800,000 invested for 10 years
Suppose you have $800,000 of pre-tax surplus, $200,000 of other income now and at sale, and it grows at 7% for 10 years with CPI at 3% and a 25% company entry rate.
| Individual: invested after tax on the surplus | $424,000 |
| Individual: after-tax outcome at sale | $709,874 |
| Company: invested after entry tax | $600,000 |
| Company: after-tax outcome in your hands | $625,554 |
| Individual comes out ahead by | $84,320 |
The company starts with more invested, but no indexation plus the second layer of tax on the franked distribution costs more than the individual's higher entry tax in this scenario. Longer horizons, different incomes or growth rates can flip the verdict — that's what the calculator estimates.
Figures are estimates based on the assumptions entered — change any input in the calculator above to see your own numbers.
Investing through a company — common questions
What does this calculator compare?
It takes a surplus you could invest and estimates the after-tax outcome of two paths: investing it in your own name, or investing it through a company. It accounts for the tax paid on the way in, growth over the years you choose, capital gains treatment at sale, and — for the company — getting the money back out as a franked dividend.
What are franking credits?
When an Australian company pays a dividend out of profits it has already paid tax on, the dividend carries a credit for that company tax. The credit offsets tax on the dividend at your personal rates. In this comparison the credit reduces the top-up tax when the company pays the sale proceeds out to you; any excess credit is treated as lost rather than refunded.
Why is the company's gain effectively taxed twice?
The company pays tax on the capital gain when it sells, and you can pay further top-up tax at your personal rates when the proceeds are distributed to you as a dividend. Franking credits offset part of that second layer, but a company also gets no CPI indexation on its cost base — both effects show up in the comparison.
Does the 25% company tax rate apply to every company?
No. The 25% rate applies to base rate entities; other companies pay 30%. You can switch the entry rate between 25% and 30% in the calculator. Company capital gains at sale are taxed at 30% in this comparison regardless of the entry rate — the calculator notes this while the two differ.
So which is better — individual or company?
It depends entirely on the inputs: your income now and at sale, how long the money is invested, growth and inflation. The calculator gives a general estimate for the assumptions you enter, and the verdict can flip as they change. It is a starting point for a conversation, not a recommendation.
Related calculator
Already own the asset?
If the question is what the proposed 2026 budget CGT changes mean for an asset you already hold, run it through the CGT comparison — current rules vs the indexed cost base, side by side.
Run the 2026 budget CGT numbers