Share options: how they are taxed in Ireland

Since 2024 the gain on exercising share options is taxed through payroll. A later sale falls under Capital Gains Tax, with the value at exercise as your cost.

A share option is the right to buy shares in your employer, or its parent, at a set price. This guide covers ordinary (unapproved) options. Approved schemes and schemes for small firms are taxed differently. See the Key Employee Engagement Programme (KEEP) and Save As You Earn (SAYE).

At grant

An option that must be exercised within seven years (a ‘short’ option) is not taxed when granted. A ‘long’ option, exercisable more than seven years after grant, is taxed at grant if the option price is below the market value. That tax is credited against the tax on exercise.

At exercise: taxed through payroll

The gain on exercise is the market value of the shares less what you pay for them. Since 1 January 2024 your employer deducts income tax, USC and employee PRSI on it through payroll. Employer PRSI is not due, subject to conditions. The same applies if you sell or give up the option for value (Revenue).

Someone earning €70,000 exercises 1,000 options at €10 when the shares are worth €25, on 10 June 2026:

Options exercised before 2024

Before 1 January 2024 the employer didn't deduct the tax. You paid Relevant Tax on a Share Option (RTSO) yourself within 30 days of exercise. You also became a chargeable person (someone who files their own tax return) and had to file Form 11 for that year. If you exercised options then and didn't do this, contact Revenue.

When you sell

Your cost for Capital Gains Tax (CGT) is the market value at exercise, which is what you paid plus the gain already taxed. In the example the shares are sold on 8 December 2026 at €30:

A December sale is paid by 31 January, so this €1,156.30 is due by 31 January 2027. Selling the shares on the day of exercise, at the same price, gives no gain at all.

To work out payroll tax and CGT on your own options, use the shares from work calculator.

Work it out

• Tax on shares from work: RSUs, options and ESPP →
• Total compensation →

Sources

• Revenue: Unapproved share options (PAYE on exercises from 1 January 2024; RTSO before) (checked 16/10/2026)
• Revenue: How to calculate CGT (checked 25/10/2026)
• Revenue: When and how do you pay and file CGT? (checked 25/10/2026)
• Revenue: eBrief No. 142/26: CGT standard rate reduced to 31% from 7 October 2026 (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.