Shares for employees

Key Employee Engagement Programme (KEEP)

The KEEP is a tax efficient share option scheme available to small and medium enterprises (SMEs). You do not require Revenue approval to offer KEEP options to your employees.

Subject to satisfying certain conditions, any gain realised by your employees on the exercise of a KEEP option is exempt from Income Tax, Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

Main features

In order to qualify for the beneficial tax treatment, there are a number of conditions which must be satisfied in relation to the:

• employee
• company
• and
• share options.

KEEP is available for qualifying share options granted between 01 January 2018 and 31 December 2025. The options cannot be exercisable within 12 months, or more than ten years, after the date of grant.

The option price must not be less than the market value of the same class of shares at the date of grant.

The shares which may be acquired by the exercise of the share option must be ordinary fully paid up shares in a qualifying company.

Note

Further guidance on KEEP and how the scheme operates is available in Key Employee Engagement Programme (KEEP).

Reporting requirements

You are obliged to file a KEEP1 Return with Revenue for any year:

• you grant a KEEP option to an employee
• or
• a KEEP option is exercised, assigned or released.

A qualifying group may designate a qualifying company within the group to file the return on behalf of the group.

For further information, please see Share reporting obligations. 

As KEEP falls within State Aid provisions, additional reporting and publication requirements may arise.

Next: Approved Profit-Sharing Schemes and Employee Share Ownership Trusts