ESS Reporting Deadlines 2025: Mobile Employees Guide
Stay compliant with ESS reporting: deadlines, global mobility pitfalls, apportionment, and actionable checklists for mobile employees. ATO deadlines: 14 July & 14 August.
Insights, analysis & key takeaways.
Introduction
Australia’s ESS reporting regime requires employers who grant shares, rights, or options to issue annual statements to employees and lodge detailed reports with the ATO. With ESS participation increasingly global, reporting mobile employees brings extra challenges—missing deadlines or mis-calculations can trigger ATO penalties and employee dissatisfaction. This guide ensures you:
- Understand ESS deadlines for 2025
- Navigate global mobility complexities
- Implement best practices for accurate reporting
- Follow an actionable checklist to stay compliant
II. What Is ESS Reporting in Australia?
Under Division 83A of the Income Tax Assessment Act 1997 (Cth), ESS reporting mandates that employers notify both employees and the ATO of share-scheme events, including grants, vesting, exercises, and disposals.Any employer providing shares, rights, or options to employees working in Australia—or to their associates—must comply. This is one of many employer compliance obligations in Australia that you’ll need to track each year.
Who Must Report
Any employer providing shares, rights, or options to employees working in Australia—or to their associates—must comply. This includes offshore parent-entity plans if Australian-based participants or secondees are involved.
III. Critical Deadlines & Lodgement Requirements
A. Employee Statement Deadline (14 July 2025)
Employers must provide each relevant employee with an ESS statement by 14 July following the end of the financial year. An administrative penalty applies for late or missing statements.
B. ATO Annual Report Deadline (14 August 2025)
The ESS annual report to the ATO must be lodged electronically by 14 August, using ATO-approved XML/software formats. Late lodgement attracts penalties.
C. Software & Format Essentials
- Mandatory software: If you have more than 50 participants or three schemes, ATO-approved software is compulsory.
- Format specifications: Reports must follow the ATO’s XML schema. See the ATO guide for details: ATO ESS Employer Reporting.
IV. ESS Taxing Points & Legislative Updates
A. What Triggers Taxation?
Taxing points occur on:
- Grant (for tax-upfront schemes)
- Vesting (for deferred-tax schemes when no real risk of forfeiture remains)
- Exercise (if the employee exercises a right to acquire shares)
- 15-year anniversary of the grant (if no earlier taxing point).
B. Post-1 July 2022 Changes
From 1 July 2022, cessation of employment is no longer a taxing point for deferred schemes, aligning Australia with global practice and avoiding triggers solely on resignation or transfer.
C. Transitional Rules
ESS interests granted before 1 July 2022 may still be taxed on cessation if the taxing point had already arisen under the old rules.
V. Global Mobility Complexities
A. Identifying Mobile Employees
- Who counts: inbound secondees, outbound transfers and business travellers with equity participation—learn more in our Global Talent Mobility deep dive.
- B. Apportionment of ESS Income
When employees work across jurisdictions, apportion discounted ESS income based on Australian workdays, residency status at each taxing point, and applicable tax treaties to avoid double taxation.
C. Data Visibility Challenges
Common obstacles: offshore plan administration, siloed HR/payroll systems, and inconsistent data fields (TFNs, ABNs).
VI. Common Compliance Risks & Oversights
Penalties & Audits: Late/inaccurate reports incur ATO fines up to 20 penalty units per breach.
Payroll Tax Mismatch: ESS report data may not align with state payroll tax returns, leading to reconciliation issues.
Incorrect Entity Reporting: Grants by parent entities are sometimes mis-reported under local ABNs, causing ATO queries.
VII. Top 7 ESS Reporting Best Practices
- Start Planning Early: Engage HR, tax, and mobility teams during vesting cycles.
- Clarify Data Requirements: Limit to essential fields—grant dates, vesting triggers, TFNs, ABNs.
- Build the Right Team: Leverage external specialists for data cleansing and ATO-format compliance.
- Address Global Income: Map work location history; apply sourcing rules and treaty relief.
- Monitor Legislative Changes: Review the Treasury Explanatory Memorandum – ESS Improvements for policy shifts.
- Manage the 30-Day Sale Rule: Track disposals within 30 days of the taxing point and report sale proceeds.
- Reconcile ESS & Payroll Tax: Align ATO reports with state payroll tax returns to avoid discrepancies.
VIII. Action Plan: ESS Reporting Checklist
- Identify all participants (including former employees with deferred taxing points)
- Collate grant, vest, exercise, and disposal data in ATO-compliant format
- Map workday apportionment for each mobile employee
- Validate TFNs, ABNs, and scheme rules across entities
- Issue ESS statements by 14 July 2025
- Lodge annual report by 14 August 2025
- Reconcile with payroll tax and audit trails
IX. Featured Snippet Q&A
Q: When must I issue ESS statements in Australia?
A: By 14 July, following the end of the financial year.per the ATO’s reporting guide.
Q: What changed on 1 July 2022?
A: Cessation of employment is no longer a taxing point for deferred ESS schemes.
Q: Who must submit the ESS annual report?
A: Employers providing ESS interests to employees or their associates must lodge an electronic report by 14 August.
X. Why Partner with Andersen Australia
- Global Mobility & Tax Expertise: Bespoke solutions for inbound/outbound employees
- End-to-End Support: From data gathering to ATO lodgement and employee communications
- Proven Frameworks: Our ESS Reporting Toolkit includes XML templates, checklists, and sample communications
XI. Next Steps & Resources
- Download: ESS Reporting Toolkit (checklists, XML schemas, statement templates)
- Contact Us: Schedule a consultation with our ESS specialists today
- Further Reading:
- ATO ESS Employer Reporting Requirements
- Income Tax Assessment Act 1997, Division 83A (Australian Government)
