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Employee Share Scheme (ESS) reporting requirements for tax-time


Employee Share Scheme (ESS) reporting requirements for tax-time

By , August 5, 2020
Employee Share Scheme (ESS) Reporting
If you’re an employer with an Employee Share Scheme (ESS), then you need to provide both the Australian Tax Office (ATO) and your employees in the plan with details of the employee’s ESS interests at the end of each financial year.


You must provide an Employee Share Scheme statement if:
– The employee or their associate have acquired ESS interests under a taxed-upfront share scheme at a discount during the financial year.
– A deferred taxing point for ESS interests acquired under a tax-deferred employee share scheme.
– A start-up concession acquisition event occurred.


The ESS statement includes the following information:
– The discount for ESS interests acquired under each type of tax upfront scheme.
– The discount for ESS interest acquired under a tax-deferred scheme if a taxing point occurred during the financial year.
– The discount for shares and rights acquired before 1 July 2009 if a cessation point occurred during the financial year.
– The total TFN amount withheld from discounts during the financial year.


If the employee is eligible for the start-up concession, the ESS statement must include:
– The number of ESS interests acquired.
– The market value of ESS interests acquired.
– The acquisition price of the ESS interests that are shares.
– The exercise price of ESS interests that are rights.
– The acquisition date of the ESS interests.


If the employee holds the ESS interest through an associate, the ESS rules require the employee, rather than the associate, to include the discount received in their assessable income.


The reporting is used by the employee in preparing their annual income tax return and if there is a sale of ESS interests the information will also be utilised to calculate the appropriate capital gain.


If you have an ESS and need guidance during tax-time, or would like to implement an ESS, get in touch with Succession Plus to speak with an Accredited Business Adviser.
Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.

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