ESPP good investment for Microsoft India employees?
Aug 30, 2021
8 Comments
Considering all the tax deductions and everything, is it a good idea to invest in msft espp for msft India employees? Would love to know from Microsoft India employees who are enrolled for ESPP. Or should we consider alternate options.
comments
You get to spend at max 15% of the basic component of your fixed salary per month and make 10% profit on that..
So even if your fixed comp is 60 lakhs (which is generally at L64 or beyond), your basic will be less than 30 lakhs..if you contribute through the year, you would input almost 4.5 lakhs a year.
and at 10% discount at market price you make 45k bucks. I understand you get to own stocks which would give you returns over long term probably..
But 45K absolute profit in a year..is it something big really?
Am i missing something here?
Compared to this, Adobe offers a 2 year lockdown and you get to contribute 25% of your overall fixed compensation..and with the stocks growing, you can make multiple lakhs in profit in an year.
Happy to hear detailed thoughts.
1. The 10% discount is taxed under perquisites. So actual discount is only about 7%.
2. MSFT is a foreign stock so gains are taxed differently. If you sell in less than a year, gains will be taxed according to your tax slab (~31% for most employees). If you sell after a year gains are taxed at 20% flat.
So yes it is a long term investment. @VforV