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Home » Your Guide To Affirm’s ESPP: Everything You Need To Know

Your Guide To Affirm’s ESPP: Everything You Need To Know

If you work at Affirm, you may be eligible to enroll in the employee stock purchase plan (ESPP). To help you make the most of this opportunity, we’ve put together a comprehensive guide to all the ins and outs of this program, from how it works to how you enroll.

If you’d like to learn more about how ESPPs work in general, be sure to read our blog about an overview of employee stock purchase plans.

Here’s a quick rundown of how Affirm’s ESPP works.

  • You can buy Affirm stock at a 15% discount.
  • You can enroll twice a year:
    • May 15th
    • Nov 14th
  • You can contribute up to 15% of your salary with a maximum of $21,250 per year.

Should You Participate In Affirm’s ESPP?

When you enroll in Affirm’s ESPP, you have the opportunity to purchase shares of your company stock at a discounted price through automatic payroll deductions.

The benefits of participating in an ESPP are clear – you can make gains and build wealth. In fact, Affirm employees can gain $3,750 or even more annually through their ESPP.

Affirm’s ESPP Discount

Affirm offers employees an opportunity to buy Affirm stock at a 15% discount.

Affirm’s ESPP Enrollment Periods

You can enroll in Affirm’s ESPP twice a year, once in the spring and once in the fall. You can enroll by the following dates:

  • May 15th
  • Nov 14th

Affirm’s ESPP Contribution Limits

The first thing you need to do is decide how much you want to contribute. You can contribute up to 15% of your salary, with a limit of $21,250 per year.

Affirm’s ESPP Offering Period

The offering period is the time that employees can purchase the stock. Affirm’s employee stock purchase plan (ESPP) has two 6-month offering periods every year. 

When you’re participating in Affirm’s ESPP, you set aside money from each paycheck from the beginning of a purchase period through the end. At the end of this purchase period, the money that has been set aside is used to purchase company stock at a discount.

If you are interested in Affirm’s ESPP, here are some key dates to keep in mind. 

The offering periods are 

  • Jun 1st – Nov 30th
  • Dec 1st – May 31st

The stock purchase dates are the last trading day before the end of each period.

Affirm’s ESPP Lookback

Affirm’s ESPP has a lookback provision for calculating the purchase price. A lookback provision is a beneficial feature that will base the purchase price for calculating the discount on the stock price either at the beginning of the offering period or at the end of the purchase period, whichever is lower.

So if Affirm’s share price increases during the offering period, you pay 85% of Affirm’s share price on the offering date. In this scenario, the discount from the market price will exceed 15%.

Let’s look at an example:

  • Share price on Dec 01 =$100
  • Share price on May 31 = $115
  • Purchase price = $85 
  • Gain / share = $30

To explain – the lookback feature would pick the lower of the two prices, which is $100, and then apply the discount of 15%.

This means you would buy shares at $85 ($100 – the 15% discount), However, they would be worth $115. In other words, you would earn $30 for every $85 you put into your ESPP.

In this scenario, someone who contributed $5,500 over just 6 months would receive shares valued at $7,441 …a gain of $1,941 in just 6 months.

Selling Your ESPP Shares

Once Affirm purchases the shares on your behalf, they will be deposited into your brokerage account. From there, you can do what you want with them…sell immediately (as long as it’s during the open trading windows), hold for a short time, hold for an extended time, etc.

How does Benny help me make the most of Affirm’s ESPP?

Benny makes it easy to participate in Affirm’s employee stock purchase plan by giving you cash to match your ESPP paycheck deduction so you can get the benefits of your ESPP without impacting your take-home pay.

For example, if you’re contributing $350 per paycheck to Affirm’s ESPP, Benny will deposit $350 in your bank account before each paycheck’s pay date.

Use our ESPP calculator to see how much you can earn with Affirm’s ESPP.