How ESPPs work
Follow the journey of a typical ESPP.
During the enrollment period, enroll in your ESPP.
During the offering period, contribute from your paycheck.
Shares are purchased at the end of each offering period.
The payout is now yours.
You've been invited to participate in your company's employee stock purchase plan (ESPP)—congratulations! ESPPs let you buy your company's shares with contributions from your paycheck. Some companies offer discounts and other features, so you can buy the shares at a lower price. If you're eligible to enroll, your company will provide the full details of your plan.
Enrolling in your ESPP and opening your account
To enroll in your ESPP and choose your contribution amount, go to Fidelity NetBenefits. If you're registering for the first time, you'll be asked to create a username and password and certify your account if you need to. This account is where you'll receive your shares at the end of the offering period.
After you enroll
The contributions from your paycheck accumulate over an "offering period." At the end of this period, your company's shares are purchased on your behalf. Your company might automatically re-enroll you in subsequent offering periods or else invite you to enroll.
Purchasing your shares
The price you pay could be lower than the market price, depending on the features offered by your company. Some companies offer a discount of up to 15% off the market price. Some offer a "lookback"—your purchase price is based on the market price at the start or end of the offering period, whichever is lower. Some companies offer both a discount and a lookback. For details, go to NetBenefits and check your plan-related documents
Taking a break from your ESPP
If you withdraw from your ESPP during the offering period, your unused contributions that have been collected from your paycheck will be returned to you. Any shares already purchased for you will remain in your account. If you wish to participate in future offerings, you might have to enroll again. For information about withdrawal procedures, deadlines, and re-enrollment, go to NetBenefits.
Changing your contributions
If your financial situation or goals change, you can adjust how much you contribute to your ESPP. To learn more about changing your contributions, go to NetBenefits and check your plan-related documents.
Managing your shares
Your shares are purchased at the end of the offering period and deposited into your account, generally within a few days of purchase. You can hold onto your shares, sell them, or do a combination of both, depending on your company's holding requirements. To sell your shares easily and link your bank account to access cash, go to NetBenefits.
Understanding your taxes
How much you'll pay in taxes depends on the type of ESPP plan you have. You may have additional taxes when you sell your shares, depending on your country's tax laws. Fidelity's tax-planning resources to learn more about taxes.
Make the most of your account
Shares that are purchased for you will be deposited to your account.
With this account, you can manage your stock plans, transfer cash to your bank, and sell your shares.
Your Stock Plan Resource Center
The Stock Plan Resource Center provides the help and education you need to understand how your equity compensation works, including taxes, and selling and managing shares.