Employee stock purchase plan

In the United States, an employee stock purchase plan (ESPP) is a tax-efficient means by which employees of a corporation can purchase the corporation's stock, often at a discount. Employees contribute to the plan through payroll deductions, which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shares in the company on behalf of the participating employees. The amount of the discount depends on the specific plan but can be as much as 15% lower than the market price.