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, USC and PRSI.

Main features

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

  • employee
  • company
  • share options.

KEEP is available for qualifying share options granted between 1 January 2018 and 31 December 2023. 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 new 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
  • a KEEP option is exercised, assigned or released.

This return must be filed on or before 31 March in the following year.

The KEEP1 return must be completed offline and then uploaded to Revenue Online Service (ROS). The return contains detailed instructions on how to complete and upload it to ROS.

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

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