Introduction
Tax Rules let you define how tax withholding should be handled for equity events in Ledgy. Once set up, Ledgy can automatically apply matching rules when an event is created, based on criteria such as a stakeholder's tax residency, the equity plan, or the individual stakeholder.
This helps you standardise withholding logic across jurisdictions and plans, while still allowing you to create more specific rules when needed. Ledgy suggests possible tax rules based on the data already in your account, but your company remains responsible for reviewing the setup and keeping tax rates up to date.
Who can use this: Admins who manage equity events and need to configure tax withholding rules in Ledgy.
Step-by-Step Guide
1. Access Tax Rules
Go to Equity Events -> Tax Rules.
On this page, Ledgy shows recommended tax rules based on the stakeholder residencies, grants, and plans already in your account.
2. Review recommended tax rules
When you first open the Tax Rules page, you'll see a table of suggested rules.
Each row represents one recommended tax rule.
Recommendations may be grouped by Residency, such as Germany or the United Kingdom.
Recommendations may also surface relevant Plans where Ledgy has detected equity plans that may require tax withholding logic.
Use the Setup button on a row to configure that recommendation.
These recommendations are there to help you get started. They are not applied automatically until you review and enable them.
3. Set up a tax rule
You can either create a new tax rule manually or configure one of the recommended rules.
Create a new tax rule
Click + Add Tax Rule.
Fill in the required fields:
Name: Enter a clear name for the rule.
Tax rate: Enter the withholding percentage, for example
20.00%.
Add at least one filter so Ledgy knows when the rule should apply:
Residency: Apply the rule to stakeholders with a specific tax residency.
Plans: Apply the rule to a specific equity plan.
Stakeholder: Apply the rule only to a specific individual.
Click Enable to activate the rule.
How matching works
When an equity event is created, Ledgy checks which tax rules match that event.
If more than one rule applies, the rules stack. This means Ledgy combines the applicable tax rates into one total withholding amount.
This is useful if you want to track different taxes separately. For example, instead of creating one single combined rate, you could maintain separate rules for different tax components.
4. Apply tax rules to equity events
Once a rule is enabled, Ledgy applies it automatically when an equity event matches the rule's filters.
For example, a rule can apply because of the stakeholder's residency, the plan involved, or a stakeholder-specific setup.
When a rule matches, Ledgy calculates the withholding amount for that event based on the configured rates.
FAQs
Can I create custom rules for specific stakeholders?
Yes. You can create rules that apply only to one stakeholder. This is helpful when an individual has a special tax treatment or an exception that should not apply more broadly.
Can I separate different tax types into different rules?
Yes. You can create multiple rules instead of one combined rule. For example, you may prefer to maintain separate rules for:
income tax withholding
solidarity surcharge
church tax
If all of those rules match the same event, Ledgy stacks them automatically.
Are tax rules updated automatically when regulations change?
No, your company is responsible for reviewing and updating tax rules when local regulations change.
Ledgy provides the configuration layer and applies the rules you set up, but it does not automatically maintain local tax rates for you.
A good practice is to review your rules regularly and update them whenever your tax advisers recommend a change.