Tax Implications of Employee Stock Plans

Employee stock plans like ESOPs, RSUs, and ESPPs help employees own company shares, but they have different tax rules.

ESOPs let you buy shares at a discount later, but you pay tax when you buy them and when you sell.

RSUs give you shares after a certain time, and you pay tax when you get them.

ESPPs let you buy shares right away, but you have to wait a year to sell them.

Each plan has different rules about when you can sell the shares and how much tax you pay.

It's important to understand these rules so you're not surprised by taxes.