Simplify employee share scheme reporting with the CTS ESS Toolkit
28/05/2026
The Australian Taxation Office (ATO) has upcoming reporting obligations for entities offering an employee share scheme (ESS). Find out how the Complete Tax Solutions Employee Share Scheme (CTS ESS Toolkit), our ATO-approved software, can help you meet these requirements efficiently and accurately.
Upcoming ATO reporting obligations
The ATO requires employers that issue shares or share options to employees to complete their reporting obligations. The deadlines to comply with the reporting requirements are:
- ESS statements are due to be issued to employees by 14 July 2026.
- ATO reports are due for lodgement with the ATO by 14 August 2026.
What do the ATO reporting obligations mean for you?
| If you are an employer | You will need to | How can SW help? |
|---|---|---|
| Reporting <50 employees and no more than 3 schemes per employee (with an Australian ABN). | Manually complete electronic ATO form. The ATO form does not produce ESS statements. These have to be done manually. | Our CTS ESS Toolkit supports ESS reporting that can generate employee ESS statements and lodge the ESS annual report with the ATO. Employee ESS statement breakdown with award details, and Australian vs foreign apportionment where applicable. Summary report of all employee ESS transactions. Start-up concession support for ESS reporting. *Further information below |
| Reporting >50 employees OR Reporting <50 employees (without an employer ABN). | • Purchase software. • Develop own in-house software. • Use an agent with ATO-approved software. | |
| With globally mobile employees. | Indicate on each employees’ ESS statement: • whether the reported figures are gross or apportioned between Australian–sourced / other work • report assignment dates (optional). |
Our innovative solution | CTS ESS Toolkit
Our CTS ESS Toolkit, an ATO-approved and compliant software solution, enables employers to simplify their online annual employee share scheme reporting obligations.
We are one of only a handful of providers to have passed ATO testing and have ATO approval for our specialised software. Using the CTS ESS Toolkit, SW has been successfully working with businesses to meet their ESS lodgement requirements.
The table below outlines the types of companies that are most likely to benefit from using the CTS ESS Toolkit.
| Company profile | Conditions |
|---|---|
| Large, privately owned company (>50 reportable employees). | Tax and finance are commonly handled in-house, with support needed for one-off compliance and advisory projects such as ESS reporting. |
| Company headquartered overseas (either >50 reportable employees with ABN or <50 if no ABN). | With subsidiaries/employees in Australia, particularly if: • the Australian employees are in split roles here and overseas • finance and payroll functions are based offshore and can’t access the required software for ESS reporting. |
| ASX-listed company. | If you are reporting ESS information through the Australian Share Registry, the ESS reporting requirements are unlikely to affect you. However, the CTS ESS Toolkit is an alternative means of meeting your ESS reporting requirements. |
Significant global entities (SGE)
SGEs are entities that have an annual global turnover of A$1bn or more. SGEs are subject to increased Failure to Lodge (FTL) penalties for late lodgement of every ATO document or approved form. The SGE penalties are currently $165,000 for each 28 days in which an approved form is lodged after the due date, up to a maximum of $825,000. The lodgement of ESS reporting falls within this definition.
The public officer of the company is responsible for the company’s obligations under the income tax law, including the timely lodgement of approved forms with the ATO. If your company is part of an SGE, we recommend implementing systems to ensure timely lodgement of ESS reports with the ATO.
How SW can help
There is limited time to meet ESS reporting requirements, and the ATO is placing particular emphasis on ensuring corporates comply with timely and accurate reporting obligations.
Now is the time to ensure your business is prepared for the reporting season. We offer a fully outsourced ESS reporting service or a software licensing option.
Please contact Sam Morris or Justin Batticciotto to learn how to comply with the ATO reporting requirements and to discover how our CTS ESS Toolkit can assist.
2026 Federal Budget announcement
Whilst the 2026 Federal Budget does not directly impact the ESS rules, the proposed capital gains tax (CGT) reforms, which would replace the 50% CGT discount with inflation indexation and introduce a minimum 30% tax rate from 1 July 2027, will change the benefit of some ESS plans for employees. As a result, ESS structures, particularly for start-ups, may become less tax advantaged and may require redesign if the proposed changes proceed without any adjustments for start-ups.
Additional services
ESS plan and review
We can conduct a comprehensive review of your ESS framework and plan(s) to support your business in understanding and addressing key areas. As part of this review, we can:
- assess your existing share scheme structure
- confirm whether awards are taxed at grant or deferred
- identify payroll tax implications and risks
- provide clear guidance on ATO and state reporting obligations
- review prior year ESS reporting for errors or gaps
- prepare and lodge amendments and voluntary disclosures
- liaise with the ATO and state revenue offices
- help minimise penalties, interest, and audit risk
- advise on new plan design or changes to existing schemes
- assist with annual reporting and documentation.
Contacts
Sam Morris
E: smorris@sw-au-com
