The minimum yearly repayment (MYR) is the amount that must be repaid each income year to keep a Division 7A complying loan on track. ChangeGPS Division 7A calculates the MYR automatically based on the loan balance, interest rate, and remaining term using the ATO's prescribed formula. For an unsecured loan, the formula is: MYR = Current Balance × (Interest Rate / (1 − (1 + Interest Rate) ^ −Remaining Term)). For example, an unsecured loan with a balance of $100,000, an interest rate of 8.27%, and 5 remaining years would have a minimum yearly repayment of approximately $25,098. Division 7A calculates this for you and shows it in the Compliance Check (Step 3). If repayments made year to date are less than the MYR, the app flags the shortfall as a deemed dividend risk.
How does the minimum yearly repayment work in Division 7A?
Explains how the minimum yearly repayment works in Division 7A and how ChangeGPS calculates and flags repayment shortfalls