Ever wondered how employees can buy their company’s stock for less than market value? 👀 💰 HOW IT WORKS Your employer deducts money from your paycheck → that money is used to purchase company shares → you may receive a discount or employer contribution/match. 🔥 EXAMPLE: 25% MATCH You contribute: $1,000 🏢 Employer adds 25%: +$250 📈 Total invested: $1,250 That’s an immediate $250 employer contribution before considering any stock-price movement. 🇨🇦 CANADA — TAX • ESPP benefits can be treated as employment income depending on the plan structure • CRA generally looks at the difference between the shares’ fair market value and what you paid when determining a taxable benefit for qualifying arrangements • When you sell, a further increase/decrease can generally create a capital gain/loss 🇺🇸 USA — TAX • U.S. ESPPs have specific tax rules • Your tax treatment can depend on when you sell the shares • A qualifying sale can involve both ordinary income + capital gain, while other sales can have different treatment ⚠️ IMPORTANT: ESPP rules vary by employer and plan. Always check your plan documents and tax situation. 🤔 ARE YOU USING AN ESPP? 💵 How much do you contribute? 🏢 Does your employer offer a discount or match? 🔥 Would a 25% match make you participate? 💬 Which company would you love to work for because of its ESPP? 👀📈 👇 Drop the company name in the comments!
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2 Comments
Moe
@moe_on_margin · 1hEdited
Great tool if your employer offers it. my understanding is that it is usually limited to company executives after certain levels who most likely are also getting LTI awards of company stock or options… I always wondered in that case would it still make sense to buy more company stock if you’re already over indexed due to access to LTI benefits? Would love to know how others feel about it?
Tej
@investwithtej · 1h
lol I emailed HR, still pending 😂😂
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