Tax relief for employees of small and medium enterprises

KEEP helps micro, small and medium enterprises attract key employees by enabling the enterprise to offer employees share options with preferential tax treatment. Most trading activities are eligible for the scheme but certain professional services and financial activities are excluded.

You may be eligible if:

• Your company is an unquoted micro, small or medium enterprise
• You are carrying out a qualifying trade

The scheme is also available to companies that belong to larger group structures provided they are part of a qualifying group. Eligibility is subject to terms and conditions which can be found on the Revenue website: https://www.revenue.ie/en/additional-incomes/employment-related-shares/key-employee-engagement-programme-keep/index.aspx#:~:text=KEEP%20is%20available%20for%20qualifying%20share%20options%20granted%20between%2001

Your company can grant employees options to buy shares at a future date at a fixed price. The employees are exempt from income tax, USC and PRSI on any gain realised due to the difference between the fixed price and market value when the employee buy the shares. You are also exempt from employers PRSI on shares awarded under the scheme provided these shares are in the employer company or in a company that controls the employer company.

These tax advantaged share options can be granted to full and part time (minimum 20 hours) employees to attract, reward and retain key members of staff. The scheme can be used to improve the attractiveness of your employment offering.