Frequently Asked
Questions
What is an Employee Stock Purchase Plan (ESPP)?
An employee stock purchase plan (ESPP) is a employer-sponsored program in which participating employees can purchase company shares at a discounted price. Employees contribute to the plan through payroll deductions which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shares in the company on behalf of the participating employees. The discount rate on company shares depends on the specific plan but can be as much as 15% lower than the market price.
Can I FundMyESPP by myself?
Yes. If you can fund your own ESPP, we highly recommend that you do so, as it is a fantastic savings opportunity for you. However, less than 30% of eligible employees take advantage of the program. We believe there are several reasons for such low participation;
1) Employees do not know they are eligible or do not understand the program.
2) Employees don’t feel comfortable having 6 or 7 pay periods’ worth of after-tax earnings being unavailable to them.
3) Employees simply can not afford to contribute.
The goal of FundMyESPP is to address all three of these issues.
What happens if the company stock price changes during the offering period?
The individual share price of your company’s stock during the offering period does not impact the savings opportunity in any way. Regardless of the price fluctuation during the period, your funds are used to purchase the company stock at a 15% discount of the share price on the purchase date. You are then able to sell the shares immediately at the market price.
The stock price of your company does not impact your earning rate through the ESPP and should not discourage you from participating.
Can I lose money by participating in the ESPP?
If you follow the recommendations offered by the FundMyESPP program, you cannot lose any money by participating in your ESPP. In addition to reading the information offered by this site, we recommend you visit other relevant sites or speak to an investment and/or tax professional on the topic of ESPPs. If you are not participating in your company’s ESPP, you are missing out on thousands of dollars in earnings every year!
How and when will I receive my funding? How can I pay it back?
If you request the Standard option, you will receive your contribution amount in equals payments on the Monday before each pay day. If you choose the Advanced option, you will receive the entire contribution amount in one payment (6 or 7 periods combined) on the first pay day of the Quarter. Keep in mind that with either option, the first payment will not be made until you verify that you have enrolled in your ESPP by uploading your pay stub.
All payments will be made using the digital payments platform Zelle®. Zelle® is the fastest and easiest way to send payments, and is already integrated with hundreds of banks and credit unions. Even if you have never used Zelle® before, your payments will be received and available in your bank account on the same day that we send them!
At the end of each quarter, your repayment to FundMyESPP can be done in a variety of ways, including Zelle® or any digital payment processor of your choice, or by sending a check to PO Box 1630, West Caldwell, NJ 07007.
Will I owe taxes on my ESPP earnings?
Yes. Your earnings from the ESPP will be subject to taxation whether you participate in FundMyESPP or not. The exact rules and rate of tax will vary depending on when you sell your shares, and we recommend you consult a tax professional or do additional research.
Generally speaking, if you sell your shares immediately following the purchase, as is recommended for participation in the FundMyESPP program, your earnings will be taxed as ordinary income for the year in which they were sold. Your profit from the ESPP will always be more than enough to pay your tax liability. For more details on the profit break down, please see our
Program Guidelines.
Can I change the contribution to my ESPP during the offering period?
No. The deadline for selecting your contribution amount is the 15th of the month prior to the quarter for which you want to participate. (ie March 15th for the Q2 period). Once the deadline has passed, you will be unable to change or cancel your contribution amount and the amount will be deducted from each paycheck during that quarter.
What is the least amount of money I can contribute? What is the most amount of money I can contribute?
The contribution limits vary by company, but generally the minimum per paycheck contribution amount is $10. The maximum amount of shares that can be purchased in one calendar year is $25,000, which equals a contribution amount of approximately $21,250. For more details, see our ‘Whatever we’re calling the full detailed guide I’m writing'. You will be unable to contribute an amount that exceeds your per paycheck after-tax income.
