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Taxable employee participation
Rewarding employees is not always done through wage payments. The employer has an interest in various reward systems, for example, to keep good employees within the company or to attract external employees. Many employers choose to pay part of the wages through employee participation.
Employee participation can take several forms. Shares can be issued, but also stock options or RSUs (restricted stock unit).
If you, as an employee, have to deal with this it can become tax-technically complicated when there is a cross-border situation. The tax consequences are different for each form of employee participation. Therefore, an overview will be presented so you know what is relevant in your situation.
How much tax do I need to pay concerning my income from employer participation?
If the total value of your shares/options/RSUs is directly or indirectly 5% or more, then you are a substantial interest holder. The benefits achieved through the shares/options/RSUs will be taxed at a rate of 26.25% in 2020. In 2021, this rate will be increased to 26.9%.
Assuming that the total value is less than 5%, the income will be taxed in box 3. The actually realized profits do not have to be reported in box 3. The income on the value of the assets is included in the tax. In box 3, a tax-free allowance of € 30,000 applies in 2020. The plans for 2021 are currently to increase the tax-free allowance to € 50,000 and € 100,000 with a tax partner.
We are happy to help!
Do you have any questions regarding employee participation and immigration or remigration? Or do you have other questions relating taxes? We are happy to help! Please feel free to contact us using the information mentioned below.