A guide to employee stock purchase plans (ESPPs)

You've been invited to participate in your company's employee stock purchase plan (ESPP)—congratulations! ESPPs let you buy company stock with after-tax 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^®Log In Required. If you're new to Fidelity, you'll be asked to create a username and password and then open your Fidelity brokerage account (the Fidelity Account^®), where you'll receive your shares.

After you enroll
The contributions from your paycheck accumulate over an "offering period." At the end of this period, shares of company stock 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. Please check your plan documents for details.

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 Fidelity brokerage account. If you wish to participate in future offerings, you might have to enroll again. Check your plan documents for information about withdrawal procedures, deadlines, and re-enrollment.

Changing your contributions
If your financial situation or goals change, you can adjust how much you contribute to your ESPP. Your plan documents will explain how to change your contributions.

Managing your shares
Your shares are purchased at the end of the offering period and deposited into your brokerage account generally within a few days of the purchase. You can hold on to your shares, sell them, or do a combination of both, depending on your financial goals and your company's holding requirements. Easily sell some or all of your sharesLog In Required and link your bank accountLog In Required to access cash.

Understanding your taxes
 How much you'll pay in taxes depends on the type of ESPP you have. Use Fidelity's tax-planning resources to learn more about taxes, when they're paid, and how to file your tax return.

Getting help
We'll stay in touch through the full life cycle of your plan and let you know when there's action to take. Go to your Profile pageLog In Required to confirm your contact information is correct, so you never miss an update or time-sensitive communications.