Orchestra's dividends feature works for Australian and New Zealand companies.
Once you’ve decided and approved a dividend payment, the process of calculating, making payments and reporting shareholder dividends can be time-consuming and prone to human error.
Orchestra's dividend statements automate the process and save you time by:
Calculating individual shareholder dividend amounts
Producing professional dividend statements for shareholders
Emailing out dividend statement notifications to shareholders
Storing dividend statements in shareholders' Orchestra portal for future access at their convenience
New Zealand companies: Producing useful reporting downloads that can be used for tasks such as filing dividend withholding tax to Inland Revenue.
Getting ready: Ensure shareholder details are up-to-date
A prerequisite to a smooth dividend distribution is ensuring you have accurate, up-to-date shareholder details. Notably these are:
Name
Physical address
Tax identifier number (eg. ATO TFN or NZ IRD number)
Whether they are non-resident (and if so, what non-resident withholding tax (NRWT) rate they are subject to)
New Zealand companies: Whether any shareholders are resident withholding tax (RWT) exempt
Any shareholder within an Orchestra profile that is using the dividends feature has access to supply all of this information by clicking ‘Custom fields’. As an administrator you can also edit these fields on their behalf.
Tip: Use Orchestra’s communications module to ask shareholders to log in and ensure their details are up-to-date ahead of a distribution.
Want help importing all of these details? The Orchestra team can do a bulk data import of shareholder dividend information for a service charge: reach out.
Dividend terminology
Dividend terminology varies by country. In Australia they use the term franking credits and in New Zealand they use the term imputation credits, to refer to the tax credits attached to dividends, designed to prevent double taxation by allowing shareholders to offset their tax liabilities.
How to create a new dividend distribution
To create a dividend distribution you will need to be logged in and have access as a company administrator to make any changes. From your company dashboard, click 'Dividends' in the left side menu and ‘New dividend distribution’.
To complete your dividend distribution you will need to know your:
Cash available for the dividend, or dividend per share - this is the declared dividend excluding franking / imputation credits and is pre-withholding tax (if applicable)
Franking credits / Imputation credits - these are your tax credits
Enter the dividend parameters:
Dividend title - give your dividend distribution a name such as FY2024 H1 (eg. denoting full year 2024 first half).
Customise shareholder statement - this toggle is optional. You can hide the distribution (payment) date on statements. A custom message of up to 400 characters can be displayed on the dividend statements.
Record date - dividend entitlements are calculated based on shareholdings at this date.
Distribution date - the date on which you intend to make the dividend payment to shareholders.
Select eligible share class(es) - if the dividend distribution requires different apportioning according to share class then select one class only and create a second dividend distribution for your other share class.
Company tax rate - this defaults to 30% for Australian companies and 28% for New Zealand companies. You can change it for your company.
Dividend is fully franked / fully imputed -
For AU companies: this is toggled on to lock the franking ratio of the gross dividend at exactly the company tax rate specified. For example, the rate will be held at 30%, and not able to deviate to, say 30.00005%.
For NZ companies: this ensures the dividend is fixed at an imputation ratio of 28% of the total gross dividend.
Include a supplementary dividend for non-residents (NZ only) - You can choose to include a supplementary dividend for non-residents who have a NRWT of 15% or more. Supplementary dividends can be applied to fully imputed dividend distributions. If you do not pay a supplementary dividend for non-residents then toggle this to the off position.
Click on the ‘Calculations’ button to move onto the next step, or 'Cancel' to exit the dividend without saving. You can return to the dividend parameters by clicking on the ‘Change parameters’ button from the next screen.
Next you will calculate your dividend.
Calculate dividend
You can calculate your dividend by entering either the total cash available for the dividend or a cash dividend amount per share. These values are interdependent, so adjusting one will automatically update the other.
Cash available for dividend - this is the declared dividend amount excluding imputation credits and is pre-withholding tax (if applicable).
Dividend per share - this is the cash dividend paid per share, auto populated when you enter your total cash available for dividend.
Franking credits (AU) / Imputation credits (NZ) - these are your tax credits attached to dividends paid by the company, designed to prevent double taxation by allowing shareholders to offset their tax liabilities.
If you have locked the franking ratio / imputation ratio in your dividend parameters, then this amount is calculated automatically when you enter either the cash available for the dividend, or the dividend amount per share. The auto-calculated value tries to closely match the franking ratio / imputation ratio. Use the ‘Adjust’ button to force the franking credits ratio / imputation ratio to match the exact rate required. The cash available per share, dividend per share and franking credits / imputation credits will be adjusted.
If you have not locked the franking ratio / imputation ratio in your dividend parameters, then you will need to enter this value.
Note: If you don’t know your franking / imputation credits then check with your accountant before continuing.
Franking credits ratio (AU) / Imputation ratio (NZ) -
If you have locked the franking ratio / imputation ratio in your dividend parameters, then this amount is preset. Use the ‘Adjust’ button to force the franking credits ratio / imputation ratio to match the company tax rate you entered in the dividend parameters. The cash available per share, dividend per share and franking credits / imputation credits will be adjusted.
If you have not locked the franking ratio / imputation ratio in your dividend parameters, then the percentage will be calculated as you enter a value for the franking credits / imputation credits.
Franking percentage (AU only) - This is calculated automatically to show what percentage of the dividend is franked. This will be 100% if your franking credits ratio equals your company tax rate (ie. fully franked). There are tax implications if you have a franking percentage that is less than 100%.
Click ‘Save & review’ to review the dividend distribution calculations by individual shareholder.
Review the distribution
Review your generated dividend distribution and generated dividend statements thoroughly. You can hover over each figure in the table of generated dividend statements for shareholders to see the formula used to calculate the figure.
If you have a linked nominee register of shareholders then you can expand the nominee shareholders using the down arrow 'v'.
The yellow exclamation mark icon '!' indicates shareholders that are missing a TFN (AU) or IRD number (NZ).
Dividend statements for any shareholder can be viewed by clicking on the ‘Download PDF’ button in the far right column (‘Statement’).
To review the company dividend statement PDF click on the ‘Export company statement’ button.
To export the table of all shareholders’ applicable details (TFN / IRD number, address etc) and dividend amounts, click on the ‘Download reports’ button and ‘Export as CSV’.
Publish your dividend
When you’re happy that your dividend calculations are exactly right, click on the ‘Publish’ button in the lower right of the screen to finalise your dividend distribution. Or 'Edit' to make changes to your dividend calculations and dividend parameters.
Click ‘Confirm’ that you are willing for investors to be automatically notified via email that their dividend statement is available to be viewed and downloaded from their personal Orchestra account, or click ‘Cancel’ to return to the generated dividend statements.
Shareholders can login to Orchestra any time to view and download published dividend statements.
NZ Companies Inland Revenue dividend withholding tax bulk filing upload
From your dividend page, click on 'Download reports' and 'Export IR DWT bulk upload'.
Enter a name and phone number for the primary company contact for Inland Revenue. Click on 'Export as CSV'. A .csv file is exported to your downloads folder ready to be uploaded to your myIR account.
Login to myIR. Select 'Dividend withholding tax' and 'Returns and transactions'. Select the period to submit a DWT return for. The month to select is the month containing the 'Distribution date' for your dividend. For example if your distribution date is 25 September 2023 then the period to select in myIR will be 30-Sep-2023.
In myIR select a 'Data entry method' of 'Upload file >'. Choose the file to upload from your computer.
If the file you upload to myIR has any errors, correct the data in Orchestra, and re-export your IR DWT bulk upload file from Orchestra.
Please note:
The IR DWT csv file exported from Orchestra has been coded specifically to meet IRD import requirements. If you open the csv file in a spreadsheet application and save it, changes will occur in the file and it will no longer be importable to myIR (it will error). Make your corrections in Orchestra, then re-export the file.
If you wish to change some of the details in the csv file, edit with a Text Editor (such as TextEdit.app) to preserve the correct file format for myIR.
Treasury stock (New Zealand)
Do you have treasury stock that you want to exclude from your dividend distribution? Orchestra is set up to recognise where a company holds shares in itself (with the same entity ID number) and will exclude this shareholder and its shares from the dividend distribution.
For example, if Conductr Limited (ID 87091) holds 121,455 ordinary shares in Conductr Limited (ID 87091) and you are doing a dividend to ordinary shareholders, then the 121,455 ordinary shares will be excluded from the dividend calculations.
Bank account numbers
Companies can opt to store bank account numbers for their shareholders in Orchestra's fully secure portal. This may make bank payments easier as the dividend distribution figures can be exported by shareholder in a spreadsheet with the bank account number.
We have provided the option of standardised (Australia / New Zealand) or custom formatting of the bank account field.
Want help importing all of these details? The Orchestra team can do a bulk data import of shareholder dividend information for a service charge: reach out.
Disclaimer
Orchestra does not provide advice of any kind.
Orchestra's dividend feature is currently in beta, and as such, reliability cannot be guaranteed. Maintaining accurate and timely shareholding details (including using the dates share transactions occurred - not the date when they were recorded at ASIC or the Companies Office - and ensuring shareholders correctly declare their withholding tax rates) in Orchestra is a critical part of the process for accurate calculations.
The generated dividend statement calculations should be checked to ensure the company advisor / administrator is satisfied.
Orchestra does not take responsibility for dividend payments that were incorrectly calculated, distributed and/or filed to tax authorities.