What you need to tell us
You need to file employment information about the taxable value of the ESS benefit to your employee, even if you choose not to deduct tax from the benefit.
If you file using the on-screen entry in myIR, by paper, or with some payroll packages (check with your payroll provider), include an employee’s ESS benefits along with their other earnings. You need to show:
- the employee's name and IRD number
- the taxable value of the ESS benefit (in the ESS field), also include this as Earnings not liable for ACC earners’ levy
- the total tax, and any student loan or child support, deducted from the benefit.
If your payroll package does not currently let you include an employee’s ESS benefits along with their other earnings, then you need to show this separately from any other earnings the employee receives. Add a separate entry in your employment information showing the:
- employee’s name and IRD number
- tax code ESS
- taxable value of the ESS benefit (as gross earnings) – also include this as Earnings not liable for ACC earners’ levy
- total tax, and any student loan or child support, deducted from the benefit.
You do not file employment information about the ESS benefits when either of the following happens:
- the employee is a past employee, and you have not chosen to deduct tax from the benefit
- the share benefit arises from an Exempt ESS, as this is exempt income.
Where ESS benefits are provided to former employees, and you have chosen not to deduct tax, it's best practice for you to notify the employee that they will have reporting and tax payment obligations in respect of the benefit.
When you need to tell us
The share scheme taxing date is the earliest of the date when the:
- benefits are cancelled
- benefits are transferred to a non-associated person
- employee effectively owns the shares in the same way as any other shareholder (and there is no material risk that the ownership or value will change)
Your ESS deferral date is 20 calendar days after the share scheme taxing date.
You can either file the information on a payday basis or twice a month. The ESS deferral date is treated as a payday.
Filing on a payday basis
You need to file the employment information within 2 working days of the ESS deferral date if filing electronically, or within 10 working days if filing by paper.
Filing twice a month
If your ESS deferral date is between the 1st and 15th of the month, treat the benefit as if the employee received it on the 15th of the month. If it's between the 16th and end of the month, treat the benefit as if the employee received it on the last day of the month.
The date you file employment information about the ESS benefits depends on whether you file your usual payday information electronically or by paper.
|File electronically||File by paper|
File information within 2 working days of:
File information within 10 working days of: