ESPP Calculator
espp.fyi
ESPP Calculator
1–10 of 35 posts
Re: ESPP Calculator
#2A new ESPP Calculator to help you calculate different scenarios when contributing to your companies ESPP. What kind of gain will you see if the stock goes up? What limits are there when the stock goes down? How much should you expect to pay in taxes when you sell the shares?
Re: ESPP Calculator
#3Nothing happens when I click "Generate Simulation".
Re: ESPP Calculator
#4Application error: a client-side exception has occurred (see the browser console for more information).
I did get it to load something once - it's not super clear. Based on the dates you enter, and the stock ticker, it'd be nice if it looked up the offering price.
I'm not actually sure how useful of a tool it really is... is it for convincing people who aren't maxing out their ESPP that they should?
Re: ESPP Calculator
#5Application error: a client-side exception has occurred (see the browser console for more information). I did get it to load something once - it's not super clear. Based on the dates you enter, and the stock ticker, it'd be nice if it looked up the offering price. I'm not actually sure how useful of a tool it really is... is it for convincing people who aren't maxing out their ESPP that they should?
It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading.
I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.
Re: ESPP Calculator
#6Application error: a client-side exception has occurred (see the browser console for more information). I did get it to load something once - it's not super clear. Based on the dates you enter, and the stock ticker, it'd be nice if it looked up the offering price. I'm not actually sure how useful of a tool it really is... is it for convincing people who aren't maxing out their ESPP that they should?
It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.
Ahh... probably good to clarify that.
My company limits us to a maximum of 15% of your total compensation in addition to IRS limits. I set it to 15% and let them sort out the IRS math.
Re: ESPP Calculator
#7Application error: a client-side exception has occurred (see the browser console for more information). I did get it to load something once - it's not super clear. Based on the dates you enter, and the stock ticker, it'd be nice if it looked up the offering price. I'm not actually sure how useful of a tool it really is... is it for convincing people who aren't maxing out their ESPP that they should?
It’s supposed to look up the stock price and display it under the price, but I’ll have to see why it’s not loading. I actually use it to optimize for how much to contribute because when the stock falls you end up hitting the convoluted IRS limit, which degrades the effective return on the total amount of contributions.
Does your company not have a discount beyond the minimum price thing?
Because it's always worth contributing the max to ESPP no matter what happens, then selling as soon as possible, if you have that. None of the tax optimization stuff is worth it. It's just an option to get 15% more money in exchange for getting paid once every six months.
Re: ESPP Calculator
#8I would strongly advise everyone to max out their ESPP contributions (you can contribute a maximum of 15% of your salary, up to the IRS mandated $25,000 limit). Why? Because it's a amazing investment that, if you sell stock immediately on reception, is risk free. I'm going to assume you know how ESPPs work, google them if you don't.
Let's do the math: consider a typical ESPP (yours may vary) with a 3 month purchasing period, 15% discount, and no lookback policy. Assume you are contributing $5000 this purchasing period.
$5000 buys n units of stock at at a price of m dollars with a 15% discount: 5000 = .85mn
Immediately sell each unit of stock for m dollars for a total return of mn dollars: 5000 = .85mn => mn = 5000 / .85 = $5882.35
You made $882.35 in "profit". Not bad at all, but not much in the grand scheme of things either. But! That's a return rate of 882.35 / 5000 = 18% in just 3 months. If you could turn around and reinvest that money in the ESPP 3 more times (4 investment periods, each 3 months long, for a total investment period of a year), you would get a yearly return of (1 + 18%)^4 = 94%. 94%! Risk free!
If that seems to good to be true, the catch is in the first paragraph. An ESPP might provide 94% yearly returns, but the amount you can invest is relatively small. But it's free money, and I encourage everyone who can to take it.
Edit: some people have rightfully pointed out that "risk free" is an exaggeration due to the possibility of significant price swings in the time between the stock purchase on your behalf and you selling the stock. You may also be unable to sell immediately due to black-out periods. Also, this isn't financial advice and I'm not an expert.
Re: ESPP Calculator
#9I would strongly advise everyone to max out their ESPP contributions (you can contribute a maximum of 15% of your salary, up to the IRS mandated $25,000 limit). Why? Because it's a amazing investment that, if you sell stock immediately on reception, is risk free. I'm going to assume you know how ESPPs work, google them if you don't. Let's do the math: consider a typical ESPP (yours may vary) with a 3 month purchasing…
Technically, not all ESPPs work like your example. And realistically, we're talking about $2,000 every six months, and half that after taxes. For the kind of person who can afford can afford to max it out, this is less exciting.
I won't say no to an extra 2k a year but it's not a exactly a deal breaker if I'm changing jobs.
Re: ESPP Calculator
#10I would strongly advise everyone to max out their ESPP contributions (you can contribute a maximum of 15% of your salary, up to the IRS mandated $25,000 limit). Why? Because it's a amazing investment that, if you sell stock immediately on reception, is risk free. I'm going to assume you know how ESPPs work, google them if you don't. Let's do the math: consider a typical ESPP (yours may vary) with a 3 month purchasing…
Technically, not all ESPPs work like your example. And realistically, we're talking about $2,000 every six months, and half that after taxes. For the kind of person who can afford can afford to max it out, this is less exciting. I won't say no to an extra 2k a year but it's not a exactly a deal breaker if I'm changing jobs.
My numbers make it less appealing. Purchase plan every six months, 5% off the price, combined with a confusing and restricting insider trading policy.