ESPP Tax Calculator

Employee stock purchase plans, or ESPPs, allow employees to purchase company stock at a discount. This lets employees share in the success of the company. But this form of equity compensation comes with its own set of tax rules. Our tax calculator can help you get an idea of what that could mean for you.

ESPP taxes generally apply to two factors:

1. The price discount you may have received through the ESPP when you bought the shares.

2. Profits from the sale of shares you purchase through the ESPP.

» Need the basics? What to know about ESPPs

ESPP tax calculator

Use the calculator below to estimate taxes on a completed stock sale or compare what you may owe under common scenarios.

The calculator prompts you to enter the marginal income tax rate and the capital gains tax rate that apply to you based on your taxable income. The other necessary information should be available through your ESPP administrator.

How to use the ESPP tax calculator

To estimate ESPP taxes under common scenarios, you need several key details.

• Stock price on the offering date: The offering date is the start of your plan’s offering period. It may also be called the grant date or the enrollment date.

• Stock price on the purchase date: The purchase date is the day the ESPP used your accumulated contributions to buy the stock.

• Discount: The discount differs from plan to plan, but it can be as much as 15% below market value. The discount you receive when you purchase the stock is recognized as ordinary income when the stock is sold. 

• Number of shares you purchased. This is the company stock you are buying.

• Price on the sale date: The sale date is the day you sold the stock you purchased through the ESPP. 

• Marginal tax rate: This is your income tax bracket. The rates are 10%, 12%, 22%, 24%, 32%, 35% or 37%.

• Long-term capital gains tax rate: The rates are 0%, 15% or 20%, depending on how long you hold the shares, your taxable income and your tax-filing status. Per the IRS, most people pay no more than 15%.

• How long you held the stock: Or how long you plan to hold it. The timing determines how the discount and any gains are taxed.

» Next steps: Do you need a financial advisor? Take the quiz.

Disqualifying sale vs. qualifying sale

The calculator will label your situation a qualifying or disqualifying sale based on the information you provide. Here’s a look at what that means.