The short answer
Yes, for most people, clearly. A qualified ESPP that offers a 15% discount — especially with a lookback — is a return you can rarely get anywhere else with so little risk. If you sell the shares soon after each purchase, you lock in the discount as profit regardless of where the stock goes next. The tax never turns that profit negative as long as you sell at or above your purchase price.
Why the discount is so valuable
A flat 15% off is already a 17.6% return on your money (you pay 85 cents to get a dollar of stock). A lookback makes it far better: the discount applies to the lower of the offering-date or purchase-date price, so when the stock rises during the period your effective discount can be 20-40% or more. Compounded over a year of purchases, this is a meaningful boost to total compensation.
The tax only decides how much you keep
ESPP gains are taxed partly as ordinary income (the discount) and partly as capital gains. Crucially, the tax reduces your profit but does not eliminate it — you are being taxed on money you made. Choosing a qualifying disposition (holding long enough) shifts more of the gain to lower long-term rates, but even a disqualifying sale keeps most of the discount.
The one real risk: concentration
The genuine downside is not the tax — it is holding too much of your net worth in one company, the same company that pays your salary. If your employer's stock falls, your job and your savings take the hit together. The clean way to enjoy the ESPP benefit without the risk is to sell shortly after each purchase and reinvest the proceeds in a diversified portfolio, banking the discount as cash.
When it might not be worth it
An ESPP is a weaker deal if the discount is small (some plans offer only 5%), there is no lookback, there is a long mandatory holding period you cannot avoid, or contributing would leave you unable to cover essential expenses or higher-priority savings like a 401(k) match. Otherwise, contributing the maximum and selling promptly is a strong default.
A quick example
You contribute and buy $10,000 of stock at a 15% lookback discount, paying about $8,500 for $10,000 of shares. Sell right away and you have a $1,500 gross gain — roughly a 17.6% return on the cash you put in — before tax. Even after ordinary-income tax on the discount, you keep the large majority of it, and you carry no ongoing single-stock risk.