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ESPP Tax Calculator (2025) – Employee Stock Purchase Plan

Estimate ESPP taxes in 2025. Enter purchase price, FMV, sale price, and rates to see ordinary income and capital gains for qualified vs non-qualified dispositions.

Calculate Your Results
Adjust the values to see how your numbers change
Ordinary Income
$3,000
Capital Gains
$8,000
Estimated Ordinary Tax
$1,050
Estimated Capital Gains Tax
$1,200
Total Estimated Tax
$2,250
Notes
This simplified model assumes 423-qualified ESPP with basic holding test toggle and does not account for state taxes.

What is the ESPP Tax Calculator?

The ESPP Tax Calculator helps estimate taxes when selling shares acquired via an Employee Stock Purchase Plan. It models ordinary income from the plan discount and potential capital gains depending on whether your sale is a qualified or non-qualified disposition.

This simplified tool assumes a section 423-qualified ESPP and basic holding test toggle. It does not account for lookback specifics, AMT, state taxes, wash sales, or other complexities.

How to Use This Calculator

  1. Enter share and price details - Input number of shares, purchase price, and FMV at purchase.
  2. Enter sale price and rates - Add expected sale price, ordinary income rate and long-term capital gains rate.
  3. Set holding status - Toggle qualified disposition if 1-year from purchase and 2-year from offering are met.
  4. Review results - See ordinary income, capital gains and estimated taxes.

Calculation Formula & Example

The Formula

Ordinary Income = Discount (qualified: min(discount, gain); non-qualified: full discount); Capital Gains = max(0, Sale Price − Basis); Total Tax = Ordinary Tax + Capital Gains Tax

Where:

  • Discount = FMV at purchase − Purchase price
  • Basis = Purchase price + Ordinary income per share
  • Gain = Sale price − Purchase price

Example Calculation

Example (2025):

  • Shares: 1,000; Purchase: $17; FMV at Purchase: $20; Sale: $28
  • Discount per share: $3; Ordinary rate: 35%; LTCG rate: 15%

Qualified: Ordinary income = min($3, $11) = $3,000; Capital gains = $8,000; Tax = $1,050 + $1,200 = $2,250

Non-qualified: Ordinary income = $3,000; Capital gains = $8,000; Tax = $1,050 + $1,200 = $2,250

Benefits of Using This Calculator

  • Tax planning - Estimate ESPP tax impact before selling to plan timing and holding periods.
  • Compare scenarios - Model qualified vs non-qualified dispositions to see tax differences.
  • Rate optimization - Test different tax rates to understand your specific situation.

Calculator Use Cases

Pre-sale planning

Estimate taxes before selling ESPP shares to plan cash flow.

Holding period analysis

Compare tax outcomes of selling now vs waiting for qualified status.

Tax advisor discussion

Bring structured calculations to your tax professional.

Frequently Asked Questions

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