Employee Share Scheme (ESS) incentives continue to be popular to retain and attract key employees especially in the current competitive labour market.
However, an often overlooked administrative aspect of setting up ESS arrangements is being aware and complying with the reporting requirements to both your employees and the ATO.
This article provides a brief summary of the requirements and impending deadlines.
Employee ESS Statement – Due 14 July 2022
You must provide the ESS statement to your employee by 14 July 2022. The statement will help your employee complete their tax return.
An administrative penalty applies to providers who fail to provide the statement.
The information required on the ESS statement includes, but is not limited to, the following:
- the discount for ESS interests acquired under each type of taxed-upfront scheme
- the discount for ESS interests acquired under a tax-deferred scheme if a taxing point happened during the financial year
- the discount for shares and rights acquired before 1 July 2009 if a cessation time occurred during the financial year
- the total TFN amount withheld from discounts during the financial year.
ESS Annual Report to ATO – Due 15 August 2022
The ESS annual report is required to be provided to the ATO by 15 August 2022 and must include, but is not limited to, the following information for each employee participating in an ESS and for each ESS that the employee is participating in:
- plan identifier – a reference that makes a plan unique within all plans offered by you
- acquisition date – the date the ESS interests were acquired
- plan date – the date a taxing point happens to an ESS interest; for a taxed-upfront scheme, this will be the acquisition date; for a tax-deferred scheme, this will be the deferred taxing point
- TFN amounts withheld from discounts on ESS interests if a taxing point arose during the financial year.
Further information can be found via the ATO website via the following link.
Depending on the types of ESS interests offered and the number of participating employees, the reporting requirements to both your employees and the ATO will vary. There are also software providers that can streamline the reporting requirements.
If you have any questions or require assistance, feel free to reach out to us and we can understand your needs and explain how we potentially may be able to assist.