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

Employee Ownership

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

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

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