Operating a company successfully requires the assistance of dedicated employees. While offering them a salary or lucrative hourly wages can help provide them with the incentive required to do their work correctly, it may not get them motivated to go above and beyond. Offering an Employee Stock Purchase Plan (ESPP) may change that. Providing an ESPP can help them feel valued and incentivize them to do an even better job. When they know they’ve got a personal stake in your company’s future, your employees will likely be willing to do all they can to ensure its success.

An Employee Stock Purchase Plan Can Provide a Discounted Stock Price

The IRS established Section 423, which allows companies to provide an Employee Stock Purchase Plan, which offers shares of a company to employees at a price that’s been discounted. Like a 401(k), an ESPP account holds a specific percentage of an employee’s paycheck. Once the amount accrues over an offering period, the funds are used to buy shares in your company, which is usually done at a discount.

Determining ESPP Discounts and Tax Benefits

Incentivizing employees with an ESSP can be a big motivator, especially if your company is doing well and on track for continued growth. Depending on the size of the discount you offer, employees can save a significant amount of money on stock purchases. The tax benefits can also be a strong incentive for employees who are willing to hold your company’s shares for the required period. If you’re interested in incentivizing your employees with this type of plan, be sure to visit Colonial Transfer Company, Inc. at https://www.colonialstock.com/.

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