ESPPs: Basics

The purchase price is typically equal to (a minimum of) 85% of the stock's fair market value. When the plan has a lookback feature, this discounted price is based on the market price either on the first day of the offering period or on the purchase date (whichever is lower). No tax applies until you sell the shares.

You can't purchase in any calendar year more than $25,000 in shares under the plan (valued at the undiscounted stock price on first day of the offering period). Unused amounts can be carried forward if the offering period spans more than one year.