Business Finances - Expanding access to employee share schemes

The Government will remove regulatory barriers and expand access to employee share schemes

Employers, especially start-ups, will benefit as employee share schemes are a powerful tool for attracting and retaining staff. Employees at all levels will be able to directly share in the business growth they helped to generate.  

The changes include:

  • Removing the current $5,000 "value cap" that limits the value of shares that can be issued to non-executive staff each year.
  • Allowing employers to offer an unlimited number and value of shares provided the employee is not charged more than $30,000 each year.
  • Where options are issued, the annual $30,000 cap can be accrued over five years, for a total value of $150,000.
  • No monetary cap where the employee is able to immediately take advantage of a planned sale or listing.
  • Removing regulatory requirements for offers to independent contractors, where they do not have to pay for interests. 

It is important to note that these are regulatory reforms not tax reforms.  The shares or options will still be taxable under the existing employee share scheme tax rules.

These regulatory reforms build on the tax reforms introduced earlier this year that removed cessation of employment as a taxing point for employee share schemes.

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Business Finances

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