Save As You Earn (SAYE)

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Save As You Earn (SAYE)

SAYE schemes have proved to be both a tax effective method of saving and an attractive mechanism to allow employees to participate in the success of the company.

Why implement an SAYE scheme?

SAYE schemes have proved to be both a tax effective method of saving and an attractive mechanism to allow employees to participate in the success of the company.

In general, the purposes of an SAYE scheme are as follows:

  • To assist employees to acquire shares in a company at a discount, without having to borrow or to pay any income tax on the discount.
  • To exempt the recipient employee from income tax on the grant and exercise of the options. 
  • To allow companies a tax deduction for the costs of running the scheme. 

Advantages of an SAYE 

  • Shares can be acquired by employees at a discount of up to 25% of the market value of the share at the beginning of the plan; Income tax, USC and employee PRSI would normally apply to the value of the discount. 
  • Tax free interest is payable on savings; Income tax at 40% would normally arise. 
  • There is no obligation on employees to exercise options and acquire shares. The total savings can be withdrawn tax free at the end of the savings period. 
  • No employer PRSI is payable.

For more information on the above download a copy of the Save As You Earn (SAYE) guide.

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