MSFT / LNKD ESPP
I'm going to enroll in ESPP program, and we get to deduct up to 15% of paychecks with 10% discount. After reading a lot about the program, I'm not clear on whether 15% is of base pay before tax, or after tax. I understand ESPP is deducted from after-tax net pay only, but not sure if we can contribute 15% of base salary or net (after-tax) base salary. Also, do you recommend going in ESPP program?
Free money!
Deduction is after tax and its 15% of the before tax amount
Great, good to hear it is before tax amount.
What does Microsoft mean that deduction is after tax? 15% is before tax right? What is after Tax? I didn't get it.
Only if you like free money...
You didn't get it: deduction from your paycheck to buy ESPP shares happens AFTER taxes are withheld. But the amount they can take to buy ESPP for you cannot be greater than 15% or your salary, which is a pre-tax number. Don't confuse the two. Also, you need to learn why your employer withholds taxes and what your pretax and after tax retirement savings options mean. And ESPP has nothing to do with them.
First paragraph: that's what i got as well. Second paragraph: I'm aware of 401K which i max out, IRA ROTH which i hesitate to use for now, and I'm aware ESPP is not a retirement saving option.
Does facebook have espp program in place?
Absolutely recommend the program. Returns add up quick!