Income Tax: employer costs for the purpose of administering its employee share scheme are deductible

Will costs incurred by the taxpayer company in implementing and administering the Employee Share Scheme be deductible under section 8-1 of the Income Tax Assessment Act 1997 ('ITAA 1997')?

Yes. The costs incurred by the taxpayer company in implementing and administering its employee share scheme will be deductible under section 8-1 of the ITAA 1997.

The Scheme is an Employee Share Scheme which complies with the provisions of Division 13A of the Income Tax Assessment Act 1936 ('ITAA 1936').

A Trustee is appointed to administer the Scheme. The taxpayer incurs costs of operating the scheme. These costs include brokerage fees, audit fees, bank charges and other ongoing administrative expenses necessarily incurred in running the scheme.

The operating costs associated with the administration and implementation of the employee share plan are part of the ordinary employee remuneration costs of the taxpayer. Accordingly they are deductible under section 8-1 of the ITAA 1997 in the year that they are incurred.