A type of employees' share scheme that meets the requirements of Schedule 3 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), referred to in ITEPA 2003 as a Schedule 3 SAYE option scheme. It is also known as a sharesave scheme, save as you earn option scheme or savings related share option scheme. It provides for the grant of share options. The exercise price can be set at up to a 20% discount to the market value at the time of grant.

Participation must be available to all qualifying employees, subject to a qualifying period of service which cannot be more than five years (and other employees may also be included). The grant of the option is conditional on the employee taking out a linked savings arrangement with a bank or building society to save up the option exercise price. Option holders save up to £500 per month from after-tax salary. Options are normally exercisable for six months after three or five years. Schemes must be notified to HM Revenue & Customs (HMRC) and the company must certify that the scheme complies with Schedule 3 of ITEPA 2003.

For more information, see Practice note, SAYE option schemes (sharesave): overview.