The majority of Australian tech workers are interested in taking part in employee share schemes, according to a new report, as the federal government mulls an exemption for such programs from its controversial capital gains tax changes.

There have been significant concerns in the Australian startup community over the potential impact of the Albanese government’s reforms to the capital gains tax (CGT).

Announced in the May budget, the changes will eliminate the current 50 per cent exemption from mid-next year and replace it with cost-base indexation, adjusted for inflation, along with a minimum 30 per cent tax rate on gains.

Following the announcement, local startups raised concerns that this would also apply to employee share schemes, which can be used by tech companies to attract employees in lieu of high salaries.

The federal government is now considering an exemption from the changes for companies deemed to be innovative, which would apply to employee share schemes.

Treasury is now consulting on the exemption, which is planned to apply to new equity issued after 30 June next year by an unlisted and independent company that is less than 10 years old and has annual turnover of less than $50 million.

The employee will have had to have held the equity for at least five years to access the exemption.

A company will also need to demonstrate they are a genuinely innovative early-stage startup.

Growing interest in employee share schemes

The potential exemption will be welcome news to many Australian tech company and startup employees, with a recent study finding many are open to employee share schemes to help build a financial future beyond their salary.

According to a survey of more than 1,000 Australian workers commissioned by wealth app Sharesies and conducted by YouGov, two-thirds of Australian tech workers are open to non-traditional workplace benefits, such as company shares and equity.

Three-quarters of workers said they would agree to take part of their salary in company shares if this was offered.

Almost three-quarters were willing to allocate up to 10 per cent of their pay to these schemes, as it was viewed as a way to grow long-term wealth, with most saying their current wage was not helping them to do this.

“Australians are starting to realise that a salary on its own isn’t going to deliver long-term wealth,” Sharesies Business general manager Susannah Batley said.

“What’s interesting is they’re not just asking for more pay, they’re looking for smarter ways to build wealth over time, and shares are increasingly part of that conversation.”

More than four in five tech workers said they were confident about their financial future, higher than many other sectors.

Tech workers were more likely to view profitable investments as a key marker of financial wealth, with nearly half of respondents agreeing with this statement.

Age gap

Employee share schemes are significantly more popular with younger workers, with nearly 60 per cent of respondents aged 18 to 34 saying they are open to them, compared with under 30 per cent of Gen Xers and just over one-fifth of Baby Boomers.

But while workers are open to these schemes when aware of them, more than half are still unfamiliar with them in general, 20 per cent not familiar with them at all, and 31 per cent only having a basic understanding.

“There’s a real opportunity here to bridge the gap between interest and understanding,” Batley said.

“Employees are open to new ways of building wealth, but they need it to be simple, transparent and easy to access.

“The organisations that can do that well will stand out.”