The APSS is an arrangement approved by the Revenue Commissioners which operates in tandem with an employee trust. It is a way of paying bonuses by awarding shares to employees in the employer’s ultimate parent company free of income tax.
The APSS is constituted by a trust deed, a set of rules and various employee documentation. An APSS can be structured in a number of different ways. In its most straightforward form an APSS is structured on the basis that the employer company provides the source of funds for the purchase of shares on behalf of the employees. The funds can be provided by way of an annual discretionary bonus. This bonus amount can be supplemented by the employee who may forego a percentage of gross salary (up to 7.5% of basic salary) to match the employer’s contribution for the purchase of shares (this facility is known as salary foregone).