Your contribution, worked through in full

Your plan & paycheck

3–5% for a high-yield savings account or CD; 7% if you'd invest in a broad index fund instead.

Biweekly paycheck deduction: $769 — 13 pay periods over 6 months.

Outcome at a glance

+$1,684·17.6% vs 0.8%

What if the stock moves before you sell

The headline return assumes you sell at the same reference price the discount was measured from. Blackout windows and order timing mean the price you actually sell at can differ — set how much, or click the line below.

Taxes: sell now vs. hold for better treatment

Everything above is pre-tax. Selling right after purchase (what this worksheet assumes by default) is a disqualifying disposition: the discount is taxed as ordinary income — like wages, with nothing withheld at the time — and any price move since purchase is a short-term capital gain or loss, also taxed at ordinary rates. Hold the shares at least 1.5 years past purchase (and 2 years past the offering date) and it becomes a qualifying disposition instead: the ordinary income is capped at the original discount, and anything the stock gains beyond that is a long-term capital gain — usually a lower rate.

Most states tax capital gains the same as ordinary income, so this is added to both federal rates above. Enter 0 if your state has no income tax, or if you'd rather blend it into the federal boxes yourself.

+$0·holding vs. selling now, after tax, at these price assumptions

This isn't a recommendation either way — it's two different trades. Holding means carrying market risk in a single stock, concentrated with your own paycheck, for well over a year with no guarantee the price holds up; the tax benefit only materializes if the stock is flat or higher by the time you sell. Selling immediately gives up that potential tax treatment in exchange for certainty and diversifying out of a single company's stock right away.

The ordinary-income cap is approximated here as your discount off the reference price used throughout this worksheet. The IRS cap is technically pinned to the plan's offering-date price specifically — if your stock price fell during the offering period, that cap can run larger than shown here. This also assumes a single blended tax rate for wages and short-term gains, ignores FICA, AMT, and the annual capital-loss deduction limit. Check your plan documents or a CPA for the exact figures on a specific grant.

Pay-period schedule