ESPP (Employee Stock Purchase Plan)

A plan to buy company stock at a discount through payroll, different tax rules than RSUs.

Also called: employee stock purchase plan

An employee stock purchase plan () lets you buy company stock, often at a discount, through payroll deductions over an offering period.

Tax treatment depends on holding periods and whether the sale is qualifying or disqualifying under IRS rules. and reporting can both apply.

ESPPs are separate from and options. Discount, lookback features, and purchase dates all affect how income is split between wages and .

Related terms

Educational definition only. Your grant documents, employer payroll, and tax forms control your situation.