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Driving your business forward

with dedicated advisory support.

Trusted Advisors to Help You Navigate Your Employee Stock Purchase Plan (ESPP)

Does your company offer, or are you thinking about offering, an Employee Stock Purchase Plan, also known as an ESPP? If so, you should be aware of the tax implications of ESPPs for both your business and your employees. The Fujikawa & Associate team has extensive experience in helping business owners structure and manage Employee Stock Purchase Plans in compliance with all tax and financial regulations.

Working with our firm, you’ll be able to easily implement and offer an ESPP, an attractive benefit option which can support your talent retention efforts. Plus, with our financial experts handling all of the payroll withholding and tax reporting associated with your ESPP, you won’t have to spend time on administrative functions associated with the plan.  

Should you offer a Qualified or a Non-Qualified ESPP?

Once you decide to offer an ESPP, you will need to decide whether to offer a qualified or non-qualified plan. Our trusted advisors can help you make the right choice based on the needs of your business and current IRS guidelines. For example, a qualified ESPP (the most common type of plan) must meet requirements such as the following:

  • Participation in the plan is limited to only company employees.
  • Shareholders of the company must approve the plan before it can be adopted.
  • Participating employees must own less than 5 percent of company stock.
  • The enforcement of a maximum offering period unless the purchase price is based entirely on the fair market value at the time of purchase.
  • Limitations of the amount of stock an employee can purchase during the offering of company stock.

In contrast, non-qualified ESPPs have fewer limitations, but also do not offer tax benefits to employees.

Contact Fujikawa & Associate, CPA for ESPP success

An ESPP is a valuable benefit that can help your business remain competitive when it comes to attracting and retaining talented workers, while affording you employer tax advantages. Let our team help you start or expand your ESPP program—contact us today.


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