I sold my ESPP shares from Jan - July in August and collected $11k in proceeds. Just saw on my final check for the year an ESPPDD reduction of $1,700 on my net pay. I am pretty confused because I expected a short term capital gains tax on the gain, which the total gain was $1,700. Any guesses on why the entire gain would later be withheld from net pay? That removes every $ of benefit from participating.

Edit: The part that was removed was the ordinary income impact. So I contributed $8.9k and received +$1.7k in shares (partly the stock price change and partly the 15% discount). I am confused since I thought a DD was a tax impact. Not a complete reduction in the benefit of participating.

did you possibly go over the yearly max for ESPP ($25K)?

I've had that happen, but they usually catch on early and stop deducting from your paycheck before the quarterly acquisition .

Probably close to $20k in contributions. So thresholds shouldn't be an issue.