Paycheck is $7200/month take home after all deductions.

Employer gives a 15% match on company stock up to $6,000, so we have to contribute $40,000 (post tax) in order to get that $6,000.

If I did this it would take my monthly paycheck down to $3866.

I'm not allowed to sell the stock for 3 months. So after 3 months, every month I can get the money out of the market to meet my personal expenses.

Question is, what would I pay in terms of taxes on that 15%? It's not a 15% discount on stock, they're just giving 15% of my contribution as extra stock. So if I buy $1000 worth of shares, they will give me $150 worth of shares for free.

lol at your work getting you evolved in some ponzi skeem

bump

Yes, it it worth it. Your ESPP's three month holding period does complicate things a bit, because now there's some risk involved. Depends on how you feel about that. Only ESPP I'm familiar with does not have any holding period, they buy the shares at the 15% discount at the end of every six month period, and you are able to sell it immediately and realize a 15% profit. The profit is taxed, but you make out very well.

You don't necessarily have to do the entire $40k contribution to get the entire $6k right away. Work your way up so it doesn't affect your paycheck so dramatically. Maybe start with 5% of your salary, and bump your contribution by 5% every six months. Use the ESPP money as it releases to you to supplement back into your spending/saving.

That 6k is going to be considered income every year plus the gain on the stock at grant (even if you don't sell).

Honestly comes down to the company. This could be a layup for you if it's a good company. Feel free to PM if you want

Is the risk you're speaking about simply the fact that the market could have a downturn and I'm stuck holding the stock until breakeven?It is a good company. So you're saying the stock that my company provides me (the 15%) would be considered income subject to my regular tax rate, but also if I sell it at a profit I get taxed for any capital gains?

So really if I sell the stock at breakeven, say $6k worth, it's like I'm making 70% of that assuming that's my tax rate?

And if I sell the stock at a profit, say $6k worth, I'm making 70% of that minus whatever the capital gains would be?

Yes.

But with an ESPP you are taxed on the profit AT GRANT. So if you buy at 100 at grant and the market price is 115, you pay taxes on 15.

It's worth it. Just Google tax laws for ESPP

Hmm in my situation they are just giving me stock at current market price. There is no discount.

Correct. Especially if you're going to be depending on getting that cash out at the end on the three month holding period to supplement your income of what you're contributing into the ESPP.

Don't invest 50% of your income in one stock bro

$40k/yr is a lot to put into one stock (assuming your company isn't Microsoft) but since you can sell it after 3 months, I'd say go for it, since you won't actually have that much money locked up at any given time

Never heard of an ESPP where there is no lookback period and a discount. So if this was me it would have to be a really high flyer.

But to be honest, if it was there would be a lookback period and a discount.

For me probably would be a no dawg.

ESPP is awesome, at least in my company. 15% off whatever EOD value is, 6 month accrual, I put 10%. I am able to sell immediately if I choose. Brb 15% gain. I hodl tho.

Would you buy that stock if you didnt get the 15% match?

If yes and its something you think will make money then do it.

if not then the 15% really doesnt matter.

Basically they are enticing you to pay your own salary so they dont have to pay it.

lol, wut?

Extra sensory perception protection?

Yea $40k is a lot but once those first 3 months are over, I'm basically deducting from my paycheck $1500 but also getting $1500 back from my contribution 3 months ago so it's a net zero. I'd be holding up about $10k or so indefinitely.Yea just checked, there's no lookback period. They just make the purchase for me on the 9th of each month at market price.Wouldn't buy it. It's a good company but the stock is fairly stable. Slow long term growth.

If it was me (and I have no information on the company) I probably wouldn't participate or would very minimally. The lookback period is critical, this is how people make money. I've made over 100% in 6 month periods before

The place I work at has a 15% ESPP, and I maxx it. EZily worth it. Even after getting repped on short term gains taxes, it's a 10% profit, give or take however the stock moved. And no way it's losing 10% in six months unless Rona lockdowns happen or chit.

It's basically like getting a really joocy CD account.