| Tom Bloomfield
A Tax Deferred Salary Sacrifice Plan allows employees to defer tax payments in relation to their employee share scheme interests to the income year in which the deferred taxing point occurs. It is a common share plan used by listed companies in Australia to reward employees. Key factors of the share plan are described below.
Generally, the Tax Deferred Salary Sacrifice Plan is utilised by Australian listed companies and can be made available to all their employees globally.
Under the Plan:
As with any employee equity plan, there are certain obligations and conditions under the plan rules. With a Tax Deferred Salary Sacrifice Plan, these are commonly
Vesting/restrictions – shares are held in holding lock for a 3-year period from the date of allotment, meaning employees cannot sell those shares until after this restricted period expires.
Dividends and voting privileges – full dividend and voting privileges apply to the shares.
Leavers - employees retain their shares. Any remaining holding locks are lifted.
It is important with any employee equity plan to obtain professional tax advice. Broadly, tax points to note under a Tax Deferred Salary Sacrifice Plan include:
BoardRoom’s market-leading Employee Equity Plan team has vast experience manging Tax Deferred Salary Sacrifice Plan for multiple listed companies. If you would like to learn more about how this share plan works and how we can help, please do not hesitate to contact us.
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