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Ngā painga kaupapa hea ā-kaimahi Employee share scheme benefits

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You can provide benefits to your employees in the form of employee share schemes (ESS). If you choose to tax these benefits they will be taxed as an extra pay / lump sum payment.

How to report employee share schemes

You need to report ESS benefits in your employment information in most situations, even if you do not deduct tax.

You do not need to report the benefit when the: 

  • employee or associate sells share rights to a non-associated third party
  • share benefit arises from an exempt ESS.

The benefits you report in your employment information must be separate from any other earning an employee receives. You’ll need to add a new entry for your employee that includes:

  • their name and IRD number
  • the payment code “ESS”
  • the taxable value of the ESS benefit – also include this as “Earning not liable for ACC earners’ levy”
  • the total tax, and any student loan or child support, deducted from the benefit.
Commissioner’s Statement: Determining 'value' of shares received by an employee under a share purchase agreement CS1701 (PDF 426KB) Download form