This article describes how Deel manages tax withholding and funding for EOR equity grants through Carta.
Deel integrates with Carta for the management of equity grants for employees. When an EOR employee opts to exercise their option grants, Deel will leverage their payroll data and history to compute the tax withholding due. Deel will then facilitate exercise funding in your local currency including the payment of total costs and withholding of calculated taxes from payroll.
Important Notes:
- Deel equity exercise management is only available for EOR in specific countries
- Both the EOR and the organization need to be onboarded to Deel’s EOR Equity Service
- We only support option grants (ISOs/NSOs)
Countries where you can exercise equity options via Deel:
France 
Germany 
India (Deel Global Payroll only) 
Israel 
Italy 
Netherlands 
Nigeria 
Poland 
Portugal 
Singapore 
Spain 
Switzerland 
How to Exercise Equity Options Through Deel
Step 1 - Select to exercise options in Carta
When an eligible EOR worker opts to exercise their options via Carta triggers this process, they will receive an email from Deel notifying them that we have begun the simulation for their estimated withholding. The email will confirm that the equity request has been initiated and the tax withholding is being calculated by Deel.
Within 5 business days, Deel will calculate the tax withholding based on the equity grant information and the employee's payroll data and history. (Salaries, Tax brackets, Total Costs, etc.)
Step 2 - Review and Approve Calculated Tax Withholding
Another email will provide the worker with the calculated tax withholding amount, and the breakdown of the total exercise cost that will need to be paid in order to complete the exercise.
You must review and approve the calculated tax withholding in order to proceed with your equity exercise.
Select Review Withholding from the email to log in and access your equity page in Deel.
Select Review to see your tax withholding calculation
Select Approve to accept the tax withholding amount and move forward to funding the request.
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If you opt to Decline the withholding calculation, Carta will be notified of your decision not to proceed and the exercise event will be canceled.
Please note: If your option expiration date is in less than 30 days, you have until this date in order to complete the process of both approving and funding the exercise.
Step 3 - Pay Withholding and Fund Your Exercise
After you approve Deel’s calculation, the exercise request will be sent back to your Carta admin for their approval. Once your Carta admin signs off on the exercise, you will receive a request via email to fund it.
You will have 30 days from the time you receive the “Fund your Exercise Event” email from Deel to fund your equity exercise. If you do not fund the exercise within 30 days, you must submit a new exercise request via Carta and approve a new tax withholding calculation.
Deel will generate an invoice in your local currency for the cost of your exercise, the calculated tax withholding, and any other fees. Follow the instructions in your email to complete funding for your exercise. Don’t forget to include the invoice ID in your payment reference!
Deel will use the funds to pay for the shares on your behalf and manage the tax withholding for you on your next payroll cycle. You will receive an email from Deel confirming that your exercise has been completed.
Step 4 - Retrieve Your Equity Certificates
Once the shares are paid for, Carta will issue certificates for your new equity. Carta will email you separate instructions on how to accept and retrieve your certificates.
If you have any questions, please contact Deel Support or your Carta administrator for assistance.
FAQ
[ACCORDION] How do I know if I am eligible for equity exercise management via Deel?
In order to be eligible for Deel equity exercise management, you must meet the following criteria:
- You must be an EOR employee
- You must be located in one of the participating countries
- Both the EOR and the organization need to be onboarded to Deel’s EOR Equity Service
[ACCORDION] Can I use my local currency to fund my equity exercise(s)?
Yes, you can use your local currency to fund your equity exercise. All amounts provided for the cost of the exercise, tax withholding, and total will be in the local currency of the worker. Deel will handle FX rate calculations as needed.
[ACCORDION] How much time do I have to review and approve the calculated tax withholding for the exercise?
Though we recommend you complete the process as soon as possible, there is no deadline from Deel for reviewing and approving the calculated tax withholding. Once the calculation is available, you have until the expiration of your equity options to approve the exercise, fund it, and receive your certificates.
Deel will notify you via email as well as on your Equity page if your options are set to expire within 30 days of your tax withholding calculation. You must complete your exercise event(s) in their entirety before the expiration date in order to exercise your options.
[ACCORDION] Is there a deadline for funding my equity exercise?
You will have 30 days from the time you receive the “Fund your Exercise Event” email from Deel to fund your equity exercise. If you do not fund the exercise within 30 days, you must submit a new exercise request via Carta and approve a new tax withholding calculation.
The only exception to this 30 day funding deadline will be on options that are set to expire in less than 30 days. You must complete your exercise event(s) in their entirety before the expiration date. Expiration deadlines cannot be extended. If you do not complete the process prior to expiration, you will lose your exercise options.
[ACCORDION] What happens if my equity options are close to expiring?
If the expiration date for your options is in less than 30 days, Deel will flag this in the email with your tax calculations as well as the Equity page. You must complete your exercise event(s) in their entirety before the expiration date. Expiration deadlines cannot be extended. If you do not complete your equity exercise(s) prior to expiration, you will lose your exercise options.