If it were me it would depends on the stability of the company I’m working for. If you work for a fairly stable blue chip ie- bank, telus, manulife etc… I’d probably contribute the maximum 10% allowed for an instant 15% return. A 15% instant return is great annual return for a blue chip dividend payer let alone an instant return.

If on the other hand the company was a new startup XYZ.com then ya it might be prudent to contribute less than the max (or sell right away to secure the 15% gain). If it is a big blue chip that you work for I don’t really buy into the argument that you’re heavily invested in the company because you work there. For example, if you work for BMO and got laid off what have you lost? Maybe a few months pay when you look for another job.

Cheers,
MCM
http://middleclassmillionaire.blogspot.com/

Say for instance you made a $2000 quarterly purchase for the stock valued at $10. You get the stock at $8.50 so you receive 235 shares and a tax bill of 40% of the 350 bucks leaving you 210 left as profit. So you decide to sell this right away and realize your gain and have a transaction fee (in my case it was 30 bucks, so I’ll use that) so you have a 210 gain - the 30 bucks making a 180 capital gain, you now will lose about 22% of that to tax as well leaving you with around 140 bucks.

So you are gaining 140 bucks a quarter or 45 dollars a month for the hassle. Also, depending on volatility between the time the transaction happens, the stocks appear in your account and the sale is processed you could be exposing yourself to risks. Is it really worth it?

When I participated in mine I was actually using it to save for Christmas presents each year, so I would start watching around mid October until the start of December for what I thought was a good price and then sold. After all the math in my situation it worked out better just to have a high yeild savings account instead. The savings account was much safer, and easier to manage, plus took far less of my time around an already hectic time of the year.