ESPP and RSU Frequently Asked Questions

Should I participate in my company's ESPP plan?
Absolutely! ESPP is a perk that you should sign up for when it is available. Would you say no to a 3% increment to your base salary? Unless you need the money in cash immediately, you should consider enrolling.
Which should I sell, stock units bought through my ESPP plan or vested RSUs?
The general advice in this regard is to sell both as soon as RSUs vest or ESPP is purchased unless you're very bullish on the stock. Think of it this way: If someone gave you an equivalent amount of money in cash, would you buy your company stock? The answer is almost always no, so for that reason, the advice is to sell and diversify (both for ESPP and RSUs). However, if you must pick one, for the risk of holding, there are greater tax benefits for ESPPs compared RSUs.
Which should I sell, stock units bought through my ESPP plan or vested RSUs?
The general advice in this regard is to sell both as soon as RSUs vest or ESPP is purchased unless you're very bullish on the stock. Think of it this way: If someone gave you an equivalent amount of money in cash, would you buy your company stock? The answer is almost always no, so for that reason, the advice is to sell and diversify (both for ESPP and RSUs). However, if you must pick one, for the risk of holding, there are greater tax benefits for ESPPs compared RSUs.
RSU Taxation: When RSUs are sold for taxes a day later, and if the vest price is higher than the sale price, can I claim capital losses on the taxes?
Yes. For example, if your vest price on the vesting day is $110.10 and if your company automatically sells 100 RSUs at $100 to cover taxes, then you can indeed claim 100x$0.10 as capital losses. Keep in mind that there are no ESSP purchase within 30 days of this sale. During a bull run, it might seem like you are losing out on money that your colleagues are earning by holding, but this will not always be the case.