Employee Share Schemes

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From April 1, 2017 employers were able to tax benefits from employee share schemes as an extra pay.

From April 1, 2018 any benefits from employee share schemes must show in the IR348 or payday filing returns as a separate line. 

During the first year, no employers used FlexiTime to tax employee share scheme benefits. Consequently we have decided not to implement the changes to the IR348 to handle these and FlexiTime cannot be used to deduct PAYE from the benefits.

Instead you will need to leave it to the employee to handle the tax on these benefits, and there is a very simple process to notify the IRD of these payments directly through myIR

Log into MyIR and select My Business > Accounts > Payroll Returns.   Select the Tax Period and either view and amend a filed return or file a new return.

Enter the employee details,  select Tax Code ESS, select the pay period start and end dates and pay frequency.

Enter the total benefit amount into both the Gross Earnings / schedular payments and Earnings not liable for ACC earners' levy

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Note that if you edit an existing payday filing return and then later reverse or create a new pay in FlexiTime for that pay date,   FlexiTime will override the previously filed return and you will need to make this change again. 

 

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