Employee share plans: Recent industrial relations and taxation developments

Abstract

The use of employee share plans is on the increase in Australia. However, many organisations have not yet fully embraced the concept of employee share plans. This paper reviews the current human resource literature on employee share plans and provides an overview of the current and pending taxation treatment of these plans in Australia. Organisations are provided with arguments supporting the use of employee share plans based on increased motivation, commitment and productivity of employee ownership along with the associated benefits of reduced turnover and absenteeism. However, there is a set of complex tax requirements and incentives, several of which are changing, which require time, effort and money to implement. Organisations committed to encouraging greater worker involvement and a greater share of financial information should turn to employee share plans irrespective of changing taxation requirements and treatment of such plans.