An ESPP lets you set aside a percentage of your pay to buy stockStock An investment that gives you part ownership or shares in a company. Often provides voting rights in some business decisions.+ read full definition of the company you work for.
4 things to know about ESPPs
- Your contributions are matched in part or in full by your employer.
- The total amount is used to buy shares of the company at market valueMarket value The value of an investment on the statement date. The market value tells you what your investment is worth as at a certain date. Example: If you had 100 units and the price was $2 on the statement date, their market value would be $200.+ read full definition every pay period.
- Your employer’s matching contributions are fully taxable to you as employment income.
- Many employee stock purchase plans let you hold your stock in a Group RRSP so that contributions are taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition deductible.
Learn more about investing in stocks.
Your investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition will rise and fall with the fortunes of 1 company’s stock, so consider contributing only a small portion of your total savings to an ESPP.