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🇺🇸 US · Equity & optionsEmployee stock purchase plan (ESPP)
Also called: ESPP
In one line
A plan letting employees buy company shares at a discount, usually via payroll deductions, most common at public companies.
In plain English
An ESPP lets you set aside salary to buy shares at a discount (often up to 15%), sometimes at the lower of two prices. It's a reliably good deal, with its own tax rules on the discount.
If you were explaining it to a 5-year-old
The shop lets staff buy toys for less than everyone else — a guaranteed little discount just for working there.
Why it matters when you sell
ESPP shares come with specific holding-period tax rules; understanding them tells you the best time to sell for the most after-tax gain.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
Primary references for this term: US SEC / Investor.gov, IRS (US tax). Our definitions are written in plain English and kept evergreen — see the glossary methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.