Check this page for
- TFN withholding (Employee share scheme (ESS))
- TFN withholding (ESS) - transitional arrangements
- TFN withholding (ESS) - withheld in error
- ESS data capture tool unavailable from 30 June 2013
- Updates to paper forms.
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TFN withholding (ESS)
Withholding tax will apply if:
- you provide a discounted ESS interest to your employee
- that employee has not given you their tax file number (TFN) or Australian business number (ABN) by the end of the relevant income year.
If your employee has given you a TFN declaration for their employment, no withholding tax is payable.
Withholding tax is calculated on the discount that your employee should include in their assessable income under the ESS rules. The rate of withholding tax is 46.5% - the highest individual marginal tax rate, plus the Medicare levy.
TFN withholding (ESS) - transitional arrangements
Division 83A of the IncomeTax (Transitional Provisions) Act 1997 contains the transitional arrangements that will apply to some shares or rights acquired before 1 July 2009.
For shares or rights that have been transitioned into the changed rules, there is no requirement to withhold tax where the employee has not provided their TFN or ABN.
For more information, refer to Transitional arrangements.
TFN withholding (ESS) - withheld in error
If you have withheld tax incorrectly, you will need to:
- refund the amount withheld in error to your employee
- provide your employee with an amended ESS statement
- lodge an amended ESS annual report to us.
For information about how to obtain a refund of the amount withheld and remitted to us in error, phone Business tax enquiries on 13 28 66.
ESS Data Capture Tool unavailable from 30 June 2013
We will no longer accept reports created using the ESS Data Capture Tool for the 2013 financial year onwards.
The ESS Bulk Load Excel Spreadsheet is still supported - we recommend you use this product instead.
The ESS Bulk Load Excel spreadsheet enables you to enter your ESS details into a predefined excel spreadsheet (to meet ESS annual report requirements).
As with the ESS Data Capture Tool, this product will also allow you to:
- produce ESS statements for distribution to employees
- create an ESS annual report that is mailed to us using acceptable electronic storage media, such as USB, CD-Rom or DVD
- import prior-year details (even if you previously lodged using the ESS Data Capture Tool).
The ESS Bulk Load Excel spreadsheet also has additional data quality checks to minimise potential reporting errors.
To find out more about the ESS Bulk Load Excel spreadsheet, or request a copy contact us:
Updates to paper forms
The following forms have been updated and the latest versions can be downloaded from our website at ato.gov.au/employeeshareschemes - select 'Calculators, rates and forms' - then select 'Forms and instructions'.
- Employee share scheme (ESS) annual report (NAT 73514-02.2013)
- Correction to Q22 TFN amounts withheld from discounts in instructions and form.
Previously published news
Current electronic reporting specifications
A new electronic reporting specification (Version 1.0.1) has been released on the Software developers website to update and clarify information content. No changes have occurred to the data records or data file structure.
Minor changes have also been made to the self-printing ESS - employee summaries approved layouts. These include:
- removal of bullet reference to TaxPack
- all references to the words 'up front' have been combined to the single word 'upfront'
You can obtain a copy of the electronic reporting specifications, and the approved layouts for self-printing ESS, from the Software developers website at http://softwaredevelopers.ato.gov.au/ESS
We appreciate the assistance we have received from employers to support our pre-filling service by early lodgment of the ESS reports. This graph and table shows the number of transactions loaded to pre-filling service up to 12 January 2013. It is motivating to see the continued increase of early lodgements each year demonstrating your ongoing commitment to the early lodgment program.
ESS pre-filling statistics
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ESS employee records available in pre-fill comparison
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Date
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Pre-fill 2011
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Pre-fill 2012
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1/12/2012
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467,698
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462,888
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8/12/2012
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468,058
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462,972
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15/12/2012
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468,089
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463,717
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22/12/2012
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468,363
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463,741
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5/01/2013
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468,538
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463,778
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12/01/2013
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469,212
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463,780
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The ESS Bulk load excel spreadsheet v1.3 was updated in July 2012 to v1.3.1. Some minor updates were made, but both versions are still current and available to use.
If you have any concerns, contact us on:
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Where can you get help?
If you need help you can contact us:
More information
For more information about employee share schemes, visit ato.gov.au/employeeshareschemes.
Last Modified: Tuesday, 26 March 2013