Employee Share Scheme reporting made simple

Employee Share Scheme reporting made simple

Simplify your annual employee share scheme (ESS) reporting obligations.

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KPMG ESS reporting

KPMG has developed an ESS reporting tool to simplify annual employee share scheme (ESS) reporting obligations.

It has been specifically developed to enable employers to automate the calculation of ESS income required to be disclosed and to comply with the new ATO ESS reporting obligations that apply for years ending 30 June 2016 and beyond.

Information is sourced direct from share plan administrators and used to calculate the gross ESS income of each employee, with functionality to determine the assessable portion for internationally mobile participants.

By automating the calculation of ESS income, the tool reduces the complexity of compliance and manages the risk often associated with year-end reporting.

Brief overview of key ESS reporting changes for FY16

Employers must change the way they manage their ESS reporting obligations for FY16 and beyond if:

  • they have internationally mobile employees participating in an ESS; and/or
  • they have previously relied on paper reports or the Australian Taxation Office (ATO) Bulk Load Excel Spreadsheet to lodge reports.

Internationally mobile ESS participants

Where an ESS participant works outside Australia for some or all of the scheme’s vesting period, some of the income derived at the scheme’s deferred taxing point may be exempt from Australian tax.

Where some of the ESS income is exempt, employers have been able to disclose only the assessable amount when preparing its annual ESS reports.

New for FY16 will be the requirement for employers to confirm if the amounts disclosed are gross or assessable, and if only the assessable portion is being reported, additional information relating to assignment dates will also need to be reported.

Mechanism for lodging reports

The ATO has changed the way ESS information is to be reported. The only lodgement channels available from FY16 onwards will be:

  • Electronic Reporting Specifications (to which KPMG ESS Reporter complies); or
  • Online ESS – only available where reporting is for less than 50 employees (this system is not yet available, but is expected to be relatively manual).

If you would like to understand more about how KPMG can support you with your ESS reporting, please contact us.

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