How to calculate the tax on share options?

The relevant tax on share options is paid at 52%

See example below on how to calculate share profit.

Let us introduce Emily who exercised her share options. Emily made an Exercised Share Profit of €20,000. This is calculated as follows:

Cost of Shares;10,000 shares @€1 = €10,000
Value of Shares;10,000 shares @€3 = €30,000
Exercised Share Profit: €20,000

Exercised Share Profit

Assuming the 40% tax rate applies
Income Tax 40%


USC 8%

Total 52%

How to register and pay RTSO 1 share options tax online?

You will need to

  1. Register for Revenue My Account
  2. Register for RTSO relevant Share Options Tax
  3. Make your RTSO1 Payment and submit your RTSO1 form.
  4. Register for Revenue’s ROS Portal to Submit your Form 11.
  5. Submit you Form 11 end of year tax return.
  6. You will need to deregister from the self-assessment system if you are no longer exercising share options.

The easiest and quickest way to pay your RTSO1 share options tax online is using Paylesstax. We can pay the RTSO1 tax and submit the RTSO1 form and Form 11 for you.

Alternatively Download
Click Here to down your Download your RTSO1 Share Options income tax Form

Unapproved Share Options

A share option is a right given to an employee to purchase shares at a predetermined price or for free at some point in the future. The employer must not deduct Income Tax, USC or PRSI related to the share options through payroll.

Where an employee benefits from an Unapproved Share Option Scheme a Self Assessment Tax Return Form 11 for the relevent year MUST be made.

The employee Must pay the Income Tax, USC & PRSI within 30 days of exercising the options. Revenue may apply interest of 3.22% per day for any late payments.  A late filing surcharge may be applied where the Form 11 Income tax return is not submitted on time. The late filing surcharge is 5% within the first 2 months and 10% afterwards. Failure to calculate the liability and complete the IT self-assessment panel on the Form 11 may result in additional penalty of €250. The employer Must provide Revenue with the details of any director or employee benefiting from such share schemes.

Employee Share Purchase Plans

Employee Share Purchase Plans ( ESPP’s) allows the employee to Purchase shares in their company at a discount normally 15% of the market value on either the first day of the offer period or the last day of the offer period.  The RTSO1 system also generally applies to ESPP schemes however the Income tax deductions on ESPP’s can be applied through the PAYE system.

Restricted Stock Units

The income tax on Restricted Stock Units (RSU’s) is processes through the PAYE system.  Some companies operate more than one share option scheme which can cause confusion for the employee when it comes to the tax liability.  As the Restricted Stock Units (RSU’s) are taxed through the payroll but the employee stock purchase plan (ESPP) shares are taxed through the RTSO1 system in general.

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