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Employers can provide benefits to employees in the form of employee share schemes (ESS).
At present, these benefits are classed as employment income but are not taxed by the employer under the PAYE or FBT rules. Instead, employees receiving these benefits must file an IR3 individual income tax return to account for the tax themselves.
Effective 1 April 2017 employers can choose to treat ESS benefits as an "extra pay". Employers can choose whether or not to deduct PAYE from the ESS benefits. However in most cases the value of these benefits must be included on the Employer monthly schedule (IR348/EMS).