The grant date is usually the first day of the offering period. This is sometimes called the enrollment date.

For numerous reasons, the grant date is important in ESPPs that are tax-qualified under Section 423, as it:

Your company must use the same date for all of these purposes. No rule requires the grant date to be the day when your salary deductions begin or when you can start enrolling in the ESPP, so you should review your plan document to see how it defines "grant date."

Alert: Your individual grant date is when you start participating in that specific offering, not when the actual offering first began (if it started earlier) or when you might have become eligible to participate.

The final ESPP regulations, adopted by the IRS in 2009, provide guidance on what your company must do to make the enrollment date be the grant date for these purposes. Your ESPP now needs to clarify that the maximum number of shares which can be purchased must be specified by either a flat share limit or a formula (e.g. $25,000 divided by the stock price on the first day of the offering). If this maximum is not fixed and determinable at the start of the offering, the purchase date becomes the grant date. Therefore, your ESPP must have a per-person, per-offering limit on the number of shares employees can purchase.

See a related article on all of the key dates and terms you must know before you participate in an ESPP.