24/08/2026
Giving a great employee a piece of the business can be a powerful incentive β but it can also create tax, ownership and exit issues that last well beyond the employment relationship. π
An Employee Share Scheme (ESS) and direct equity ownership are not the same thing.
Before offering or accepting shares, ask:
β
Is the goal to reward an employee or create a genuine co-owner?
β
What voting and dividend rights come with the interest?
β
Could tax arise before the shares can be sold?
β
What happens to vested interests if employment ends?
β
How will the arrangement affect the company's valuation, accounting and future ownership?
One important update: leaving employment is no longer, by itself, a deferred ESS taxing point for employment ending on or after 1 July 2022.
And if an SMSF is being considered as part of a broader ownership strategy, additional superannuation rules can apply.
A little planning before the paperwork is signed can prevent much bigger problems later.
Symmetry Accounting & Tax Pty Ltd can assist Perth business owners with accounting, taxation and business advisory considerations around business ownership and employee equity.