Invest in your work and your future with an ESPP

An Employee Stock Purchase Plan (ESPP) is a company-run program that lets you purchase company stock—sometimes at a discount. And that can make it a great way to potentially save for short- and long-term goals.

Start with the basics

New to ESPPs or just need a refresher? Get a glimpse into how things work and some commonly used terms.

Find out what you need to know about an employee stock purchase plan.

Get more familiar with the key steps that occur so you know what happens next.

Learn about the offering period, when shares are purchased, and the price you pay.

Have an ESPP, but haven't yet enrolled?

If you're eligible and the enrollment window is open, you'll see "Enroll" next to your ESPP's name when you log in to NetBenefits®. You’ll be prompted to open your Fidelity Account® if it isn't already open (it's where your purchased shares are deposited).

Explore what ESPPs can offer

From enrolling to when shares are purchased and how much you’ll pay, this video covers it all. You’ll also learn more about some of the features ESPPs can offer, like a discount or look-back. Be sure to check your company's plan documents to find out what your specific ESPP might offer.

Watch to learn more about ESPPs (7:47)

Related resources and actions

ESPP contribution limits

The IRS limits the purchase of stock in a tax-qualified Section 423 ESPP to $25,000 per calendar year.


Qualifying dispositions (PDF)

In a qualified ESPP, the income from your shares may receive special tax treatment when you sell.


Holding periods Log In Required

Some plans require shares to be held for a certain period of time before they can be sold or transferred. Check your company's plan documents to see if this applies to you.


Selling shares Log In Required

Easily sell some of—or all—your shares by initiating a trade with Fidelity.


Frequently asked questions

See all ESPP FAQs

  • What is an ESPP?

    "ESPP" stands for Employee Stock Purchase Plan, which is a type of plan that provides you with a convenient way to buy your company stock. If you enroll, you choose an amount to be deducted from your paycheck, and those deductions accumulate to purchase stock on a predetermined schedule.

  • How does an ESPP work?

    An ESPP lets you choose the amount that you want to contribute each paycheck to the plan. Depending on your plan, this can be a percentage or a dollar amount. Each pay period, your company deducts this amount (after tax) and holds on to it until it’s time to purchase your shares. On the designated purchase date, your company uses that money to purchase your shares of company stock.

    Consider how much you can afford to have deducted from your paycheck before you enroll.

  • What are the benefits of participating?
    • An ESPP can be a convenient way to save for the future and potentially create extra cash.
    • An ESPP can make saving easy and painless, since there are regular contributions coming from your paycheck (this removes the temptation to spend the money).
    • An ESPP doesn't just offer the ease of routine saving; it can give you another way to participate in your company's potential success.
  • What is a look-back period?

    If your company offers a look-back provision, this compares the stock price at the beginning of the offering period with the price on the purchase date and uses the lower amount to calculate the purchase price. Because a look-back feature allows you to buy shares at whichever price is lower, the price at the beginning OR the end of the period, it is an attractive feature.

    Example 1 – Stock Price Increases: Your company stock is trading at $10/share at the beginning of the offering period and $15/share by the purchase date. With the look-back provision, you get to buy shares at the lower of these two prices, which in this example is $10/share.

    Example 2 – Stock Price Decreases: Your company stock is trading at $20/share at the beginning of the offering period but falls to $15/share by the purchase date. In this instance, the look-back feature doesn’t apply, and you buy shares at the lower purchase date price, which in this example is $15/share.

  • How do I enroll in the ESPP?

    If you're eligible and the enrollment window is open, you’ll see Enroll next to your ESPP's name when you log in to Fidelity NetBenefits®Log In Required. You'll be prompted to open a Fidelity Account® if you don't already have one. This is the account where your purchased shares will be deposited. To finish enrolling, simply choose an amount to contribute and then agree to the terms.

    For more help enrolling in your ESPP, please review this guide.

  • What is an enrollment period?

    It's your chance to get into the ESPP or make changes. During this period, which is predetermined by your employer, you will be able to enroll and select how much you want to contribute from your paycheck.

Stock plan glossary

What’s that word? Find definitions for commonly used terms.

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