Social insurance contributions are generally payable by the employee and employer when an option is exercised.

A Medicare levy is payable by the employee when an option is subject to income tax on the amount included in taxable income. An additional Medicare levy surcharge may also be imposed on higher-income employees without appropriate health insurance.

Social insurance contributions are payable on the spread and are subject to a cap. Withholding is required.

Generally, the spread is not subject to social insurance contributions, provided at least they are not granted by the employer of the beneficiary. The notion of "granting" should in this regard nevertheless be construed in a broad sense, and it covers both the situations where the employer directly pays the benefit, the situation where the employer indirectly pays the benefit because the parent company granting it charges the cost for doing so to the employer, but also covers the situation where the employer does not bear the financial cost of the benefit but intervenes in the granting of the benefit. Notably in its judgment on October 10, 2016, the Belgian Supreme Court decided that social security contributions are due if all costs of the benefit are paid by a third party, but the employer decides which person receives the benefit in question. For stock options, it might nevertheless still be possible to be exempt from social security contributions if all conditions stipulated in the Act of March 26, 1999 are met.

Additionally, in relation to stock options, the National Office for Social Security nevertheless changed its position (cfr. Above). This does nevertheless not concern stock options in the sense of the act of March 26, 1999, as this Act expressly states that no social security contributions are due these benefits.

Although options generally are not subject to social insurance contributions, regularly granting options or reimbursement of option costs could result in the options being deemed employment income subject to such contributions by tax authorities.

Generally, social insurance contributions, which are based on an employee's compensation and are subject to a cap, are payable on the spread when an option is exercised.

Remunerations derived from stock options plans are subject to social security contributions if, together with the remaining remunerations payable to the eligible employee in the same month period, do not exceed the capped compensation that law states as a basis for social security calculations.  For instance, if the base salary of an eligible employee suffices the capped basis, compensation from the plans paid in the same period will not be subject to social security contributions since they are over the capped basis.  Otherwise, if compensation of the plan, together with the remaining remunerations payable in the month, is lower than the capped month basis, they shall trigger social security contribution payments.  In addition, should the benefits paid directly by the issuing company with no charge-back to the local employer, it is debatable if they will trigger social security contributions obligations.

Social insurance contributions may be imposed on the spread.

If the stock options are granted as a non-salary payment, they would not be included in the basis to calculate social security contributions, provided that such payments do not exceed 40 percent of the employees' total monthly compensation. If these non-salary payments exceed that 40 percent of the monthly compensation, the excess will be subject to social security contributions.

The basis to calculate contributions to the social security system (pensions, solidarity pension fund, health and labor risks) is the monthly salary earned by the employee. If that monthly salary exceeds 25 times the minimum legal wage, contributions to the social security system will be calculated on the maximum basis of 25 times the minimum legal wage.

In case of employees earning a so-called "integral salary," 70 percent of salary will be the basis to calculate contributions to the social security system.  However, if 70 percent of the integral salary is more than 25 times the minimum wage, contributions to the social security system will be calculated on the maximum basis of 25 times the minimum wage.

Social security and health insurance contributions do not apply provided that:

• The Czech employer is not responsible for the cost of the plan (ie, there is no reimbursement of costs)

• The shares of the Czech employer are not included in the plan and

• Payments are not made through the Czech employer.

The spread is subject to Danish labor market contribution when the spread is taxable.

The spread may be subject to social insurance contributions.

The spread is not subject to social insurance obligations.

The spread may be subject to social insurance contributions.

Employee

For Stock Options granted since 09/28/2012

The surplus discount, if any, is subject to social contributions (ie, CSG-CRDS at a global rate of 9.7 percent) and employee social charges (around 25 percent, subject to various caps and thresholds).  Said social contributions and charges are withheld by the employer.

Acquisition gain is subject to social contributions (ie, CSG-CRDS) at a global rate of 9.7 percent (including 6.8 percent deductible from taxable income).  It is also subject to an employee social contribution at a rate of 10 percent.

Capital gain is subject to social contributions (ie, CSG-CRDS) at a global rate of 17.2 percent (including 6.8 percent deductible from taxable income), due by the employee.

Employer

For Stock Options grant since 09/28/2012

At the time of grant of the option, the employer will be subject to a contribution to the social security scheme (contribution sociale patronale) of 30 percent with respect to stock options on either:

• The fair value of the shares as estimated when drawing up the consolidated annual accounts or
• 25 percent of the value of the shares that the stock options relate to, payable within a month from the grant of stock options.

The surplus discount, if any, is subject to social employer charges amounting to approximately 45 percent, subject to various caps and thresholds.

There is no additional contribution if the employer provides information to the social security administration or URSSAF (ie, the identity of the employee or manager who received shares in the last year, number and value of the shares).

In case of violation of this reporting obligation, the acquisition gain is subject to social contribution as salary.  The employer is liable for the employee's 25-percent portion in addition to its own 45-percent portion.

The spread is subject to social insurance obligations, up to a cap.

Typically, according to the existing social security legislation, stock options are subject to social insurance at vesting. However, a new social security reform is anticipated and, therefore, given that there have been changes in the tax treatment of the aforementioned benefits, similar changes may also arise in the social security treatment of same.

Not applicable for this jurisdiction.

Generally, proceeds from the acquisition of shares and the subsequent sale of shares are subject to social tax.

Social insurance generally is not applicable to option benefits.

Unless the parent company is reimbursed by the subsidiary for option benefits, which are routinely granted, such benefits generally are not subject to social insurance contributions.

The spread is subject to social insurance contributions.  Employer social insurance contributions should not apply unless the award is cash-settled.

Portions of the taxable amount are subject to social insurance contributions, depending on whether the income is classified as ordinary income or capital gains.

Social insurance contributions are generally not imposed on the spread. However, a case-by-case analysis is recommended.

The spread is not subject to social insurance contributions, as long as the options are not considered part of the employee's salary.

There is no social insurance scheme per se for Malaysia but there is a mandatory requirement for contributions to the Employees' Provident Fund (EPF) and Social Security Organization (SOCSO) for all employees who are Malaysian citizens. The requirement to contribute is based on a percentage of wages. So far as the plan is carved out and not made a term of the employment contract and does not form part of wages, there is no requirement to contribute to EPF or SOCSO based on the employee's entitlement to the stocks.

The spread is likely subject to social insurance contributions if the Mexican subsidiary reimburses the parent company for the cost of the option benefits.

Social insurance contributions are imposed on option benefits to the extent that the employee's annual employment income has not yet exceeded the maximum income base for social security premiums.

New Zealand does not operate a general social insurance regime.

Social insurance contributions are generally payable by the employer and the employee. However, there are no specific requirements for social insurance contributions in relation to employee share and stock options.

The spread is subject to social insurance contributions at exercise.

Unless the parent company is reimbursed by the subsidiary for option benefits, such benefits generally are not subject to social insurance contributions.

Unless the subsidiary is involved in the offer of options or reimburses the parent company, the benefits from options generally are not subject to social insurance contributions.

Employers and employees make monthly social security contributions based on monthly earnings – as a rule, 23.75 percent of the relevant retribution for the employer and 11 percent for the employee. Ownership of securities is not taken into consideration to calculate said contribution, unless it is considered part of the employee’s remuneration.

Unless the offer of options is deemed to be an employment benefit, options generally are not subject to social insurance contributions.

Generally, the spread is unlikely to be subject to social insurance contributions.

Options generally are not subject to social insurance contributions.

Option benefits generally are subject to social insurance contributions and employee health insurance contributions.

The spread is generally subject to social insurance contributions.

The spread is generally subject to social insurance contributions upon exercise.

The spread at exercise is subject to social insurance contributions, subject to the general ceiling exemptions.

The spread is subject to social insurance contributions upon exercise.

The spread is subject to social insurance.

If the taxable income of any employee upon each exercise exceeds TWD20,000 (approximately USD700), the entire income is subject to Taiwan social insurance contributions at 2.11 percent.

Options generally are not subject to social insurance contributions.

The spread is generally subject to social insurance contributions.

Stock options are not subject to social insurance obligations, nor are dividends and proceeds from the sale of shares.

National Insurance Contributions (NICs) are due on the spread at exercise if shares are "readily convertible assets."

Through an approved Joint Election or other contractual arrangement, the employer's NICs obligation may be transferred from the employer to the employee.

The spread is not subject to social insurance.

The spread generally is not subject to social insurance contributions.