Item 12 - Employee share schemes

This question is about discounts on 'employee share scheme interests' (ESS interests) that you received under an employee share scheme.

See Employee share schemes - employees and Foreign income exemption for Australian residents and temporary residents - employee share schemes on the ATO website for further information.

The Employee share schemes discount amount shown at label B is calculated and integrates from the worksheet (emp). Click any label from A to G at this item to open the emp worksheet.

Label D - Discount form taxed upfront schemes – eligible for reduction

Generally, the difference between the market value of an ESS interest and what an employee pays for the interest is the amount that will be taxed upfront.

Add up all the discount amounts you received from 'taxed-upfront schemes eligible for reduction' including amounts shown on your employee share scheme statements and any foreign source discounts you received.

Enter the whole amount of the discount. Tax will calculate the assessable discount after applying the income test.

Label E - Discount from taxed upfront schemes – not eligible for reduction

Enter the amount of discount where the scheme does not meet the conditions for deferral because the shares are not at a real risk of forfeiture or acquired under a salary sacrifice arrangement.

Add up all the discount amounts you received from 'taxed-upfront schemes not eligible for reduction' including amounts shown on your employee share scheme statements and any foreign sourced discounts you received.

Label F - Discount from deferral schemes

Add up all the discount amounts you received from 'tax-deferred schemes' where a 'deferred taxing point' occurred during the current income year including amounts shown on your employee share scheme statements and any foreign source discounts you received.

Label G - Assessable discount on shares acquired pre-1 July 2009 and ‘cessation time’ occurred during the financial year

Add up all the discount amounts from employee share scheme interests you acquired before 1 July 2009 where:

you did not make an election to be taxed upfront at the time you received them, and
a 'cessation time' occurred during the current financial year.

Label B - Total assessable discount on shares acquired pre-1 July 2009 and 'cessation time' occurred during the financial year

This is the total amount of discount that is to be included in assessable income. Tax will calculate this amount which is the taxpayer's income test income is less than $180,000 is the sum of labels D, E, F and G.

Where the taxpayer’s income test income is $180,000 or more, Tax will not allow the $1,000 discount and the amount at label B will be the sum of D - 1,000 plus E, F and G.

Label C - TFN Amounts withheld from discounts

If the taxpayer did not provide a TFN or an ABN to the employer, then tax at the top marginal rate plus the Medicare levy will have been deducted.

Any such amounts withheld should be entered at label C.

Label A - Foreign source documents

If you paid foreign income tax in respect of any discounts you received on ESS interests shown at labels D, E, F and G above, you may be entitled to claim a foreign income tax offset. The offset will be claimed at item 20.

You will not be entitled to claim a foreign income tax offset for any discounts that relate to a period when you were a foreign resident for income tax purposes.

Write at A the total amount of your discounts from ESS interests for which you are claiming a foreign income tax offset and include the foreign tax paid at the Foreign tax paid field. You must also include the foreign tax paid in the foreign income worksheet so that it can be included in the FITO calculations.