PayPal Equity FAQ

PayPal uses multiple RSU vesting schedules depending on your role and grant type. Common schedules include 3-year annual vesting (1/3 per year), 4-year vesting (25% in year 1, then monthly), and for some new hires, a 3-year schedule with 1/3 vesting after a 12-month cliff, then 1/12 quarterly thereafter. Most schedules have a 12-month cliff before your first shares vest.

PayPal's ESPP allows you to purchase stock at a 15% discount with a lookback provision. The plan has 24-month offering periods divided into four 6-month purchase periods, with enrollment windows in May and November. You can contribute up to 10% of your base salary, subject to a $25,000 annual maximum based on fair market value.

When your RSUs vest, they're treated as ordinary income and subject to federal, state, and payroll taxes. PayPal's default withholding rate is 22% for federal taxes, though you can adjust this rate. You'll also owe capital gains tax on any appreciation when you eventually sell the shares.

To qualify for favorable tax treatment on ESPP shares, you must hold them for more than 1 year after the purchase date AND more than 2 years after the offering date. This is called a qualifying disposition and can result in some of your gain being taxed at lower long-term capital gains rates instead of ordinary income rates.

Yes, PayPal matches 100% of your contributions up to 4% of your base salary, with a maximum employer contribution of $19,500. The match vests immediately with no waiting period. PayPal also offers Roth 401(k) options and allows mega backdoor Roth contributions through after-tax contributions.

PayPal grants Non-Qualified Stock Options (NSOs) that typically vest over 48 months, with 12.5% vesting after 6 months (or 25% after one year from hire), then 2.08% monthly thereafter. Options expire 10 years from the grant date, but specific details about how long you have to exercise after leaving the company are not publicly available—check your grant documents or contact HR.

Yes, PayPal employees can expect annual stock refreshers. However, the amount of RSUs you'll receive in refresher grants is generally not predetermined and varies by performance and level. Refresher grants typically vest over a new four-year period.

All PayPal employees are subject to the company's Insider Trading Agreement, which restricts when you can trade. PayPal does offer 10b5-1 trading plans, which allow you to set up pre-scheduled sales that can execute even during blackout periods. Contact your stock plan administrator for specific blackout dates that apply to you.