From January 2024, the way in which Employee Share Purchase Plan’s (ESPP) are taxed has changed. Whether you’re an individual participating in an ESPP or a small business owner offering these plans, these changes affect you!

What is an ESPP?

An ESPP is a way for employees to purchase shares in their company through payroll deductions, sometimes at a discounted price. The discount allowed is normally 15% of the market value of the shares on either the first day or the last day of the offer period, whichever is lower. The offer period is typically six months.

Taxation of ESPPs

The taxation of ESPPs involves charging tax on the discount allowed by the company as a benefit derived from employment. The amount chargeable is the difference between the market value of the shares when they are purchased on behalf of the employee and the amount the employee pays for those shares. Income Tax, Universal Social Charge (USC), and Pay Related Social Insurance (PRSI) are payable on the amount of the discount.

Prior to 31st December 2023 the responsibility was on the employee to calculate the discount and pay 52% of that to Revenue within 30 days of purchasing the shares. They were also required to register for self-assessment and file and Income Tax Return (Form 11) each year.

Changes in 2024

From January 1st 2024, the responsibility will be on the employer to tax this discount through your payroll and report same to Revenue. The employee no longer has to be registered for self-assessment and file each year. However, you will still have an obligation to file in the event of selling any shares.


As always, consult with a professional accountant or tax advisor to understand how these changes impact your specific situation.