Your plan document can tell you how your employee stock purchase plan works, but there are still details to dig into before you can understand if using your ESPP is the best choice for you.
In addition, you’ll want to consider your personal cash flow. Contributions to an ESPP will often be deducted from payroll. This results in less take home pay while your funding the plan.
You’ll also want to develop a strategy regarding when to sell the stock. Option 1 is to sell the stock immediately upon purchase, selling as a disqualifying sale and removing stock risk. Option 2 is to hold the stock until the shares reach qualified status and obtain preferential long term capital gains on some or most of the gain.