Employee Share Scheme (ESS) Tax Calculator
Estimate the tax on your employee share scheme discount — for taxed-upfront, tax-deferred and start-up schemes — at your marginal rate. Pick your financial year below.
Value at the taxing point (acquisition, or the deferred taxing point).
What you paid to acquire the interests. Often $0 for grants.
Your income for the year excluding the discount — sets your marginal rate. Also used to test the $1,000 reduction limit ($180,000).
Enter your share value and income to estimate the tax on your ESS discount.
How ESS tax works
When you get shares or rights through work for less than they’re worth, the difference — the discount — is generally taxed as income at your marginal rate. The key question is whenit’s taxed and whether a concession applies:
- Taxed-upfront — taxed in the year you acquire; a $1,000 reduction may apply if your adjusted taxable income is $180,000 or less.
- Tax-deferred — taxed later, at the deferred taxing point (up to 15 years); no $1,000 reduction.
- Start-up concession — not taxed under ESS at all; CGT applies when you sell.
Worked examples
Taxed-upfront, income under $180k (FY2026-27)
A $5,000 discount with $90,000 of other income: the $1,000 reduction applies, so $4,000 is assessable. At a 30% marginal rate plus 2% Medicare, that's $1,280 tax — you keep $3,720 of the discount.
Taxed-upfront, high income
The same $5,000 discount with $200,000 of other income gets no $1,000 reduction, and is taxed at the top 45% rate plus 2% Medicare — $2,350 tax.
Tax-deferred
A $20,000 discount taxed at a deferred point, with $120,000 of other income: no reduction, and it straddles the 30% and 37% brackets — about $6,750 tax (including Medicare).
Start-up concession
An eligible start-up grant isn't taxed now — you pay CGT only when you sell, using the market value at acquisition as your cost base.
Frequently asked questions
- How is an employee share scheme discount taxed?
- The "discount" — the market value of your ESS interests minus what you paid — is generally assessable income taxed at your marginal rate (plus the Medicare levy). When it’s taxed depends on the scheme: taxed-upfront (in the year you acquire) or tax-deferred (at a later deferred taxing point).
- What is the $1,000 reduction?
- For taxed-upfront schemes, if your adjusted taxable income is $180,000 or less, you can reduce the assessable discount by up to $1,000. It doesn’t apply to tax-deferred schemes.
- What’s the difference between taxed-upfront and deferred?
- Under a taxed-upfront scheme the discount is taxed in the year you acquire the interests (and the $1,000 reduction may apply). Under a tax-deferred scheme, tax is delayed until a "deferred taxing point" (up to 15 years), and the taxable amount is the market value at that point less your cost — with no $1,000 reduction.
- What is the start-up concession?
- If your employer is an eligible start-up — broadly, an unlisted company with aggregated turnover under $50 million, in operation less than 10 years, where you hold no more than 10% and meet a minimum holding period — the discount is NOT taxed under the ESS rules. Instead, capital gains tax applies when you eventually sell the shares.
- What is the 30-day rule?
- If you dispose of your ESS interests within 30 days of the deferred taxing point, the taxing point moves to the date of that sale — so the taxable amount is based on the sale, not the earlier point.
- Does this include capital gains tax when I sell?
- No. This estimates the tax on the ESS discount only. Any later gain when you sell is taxed under CGT (using the market value at the taxing point as your cost base). Note the 50% CGT discount is being replaced by cost-base indexation from 1 July 2027, which will affect disposals from then.
- Is this calculator official ATO advice?
- No. FigureTax is independent and provides general information and estimates only, not financial or tax advice. It excludes tax offsets, HELP/STSL repayments and the Medicare levy surcharge. Confirm your ESS statement figures and seek licensed advice before acting.
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General information only. This calculator estimates the tax on an ESS discount using resident marginal rates plus the 2% Medicare levy for the selected year. It excludes tax offsets, HELP/STSL repayments, the Medicare levy surcharge, and CGT on later disposal. It is not financial or tax advice — confirm your ESS statement and seek licensed advice.