We grant stock-based compensation to employees and directors. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. We issue new shares of Microsoft common stock to satisfy vesting of awards granted under our stock plans. We also have an ESPP for all eligible employees.

Stock-based compensation expense and related income tax benefits were as follows:


(In millions)


Year Ended June 30,	2025		2024		2023

Stock-based compensation expense	$	11,974	$	10,734	$	9,611
Income tax benefits related to stock-based compensation		2,027		1,826		1,651

Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over a service period of four years or five years.

Under the Executive Incentive Plan, the Compensation Committee approves stock awards to executive officers and certain senior executives. RSUs generally vest ratably over a service period of four years. PSUs generally vest over a performance period of three years. The number of shares the PSU holder receives is based on the extent to which the corresponding performance goals have been achieved.

The fair value of stock awards was estimated on the date of grant using the following assumptions:




Year Ended June 30,			2025			2024			2023

Dividends per share (quarterly amounts)	$	0.75 – 0.83		$	0.68 – 0.75		$	0.62 – 0.68
Interest rates		3.4% – 5.5%			3.8% – 5.6%			2.0% – 5.4%

During fiscal year 2025, the following activity occurred under our stock plans:


Shares			Weighted Average Grant-Date Fair Value


(In millions)

Stock Awards

Nonvested balance, beginning of year	88		$	292.28
Granted (a)	39			413.90
Vested	(38	)		293.25
Forfeited	(7	)		317.23


Nonvested balance, end of year	82		$	347.44

(a)

Includes 1 million of PSUs granted at target and performance adjustments above target levels for each of the fiscal years 2025, 2024, and 2023.

As of June 30, 2025, total unrecognized compensation costs related to stock awards were $21.6 billion. These costs are expected to be recognized over a weighted average period of three years. The weighted average grant-date fair value of stock awards granted was $413.90, $339.46, and $252.59 for fiscal years 2025, 2024, and 2023, respectively. The fair value of stock awards vested was $16.2 billion, $16.0 billion, and $11.9 billion, for fiscal years 2025, 2024, and 2023, respectively. As of June 30, 2025, an aggregate of 98 million shares were authorized for future grant under our stock plans.

We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period.


(Shares in millions)


Year Ended June 30,	2025		2024		2023

Shares purchased		6		6		7
Average price per share	$	385.10	$	339.46	$	245.59

As of June 30, 2025, 62 million shares of our common stock were reserved for future issuance through the ESPP.

We have savings plans in the U.S. that qualify under Section 401(k) of the Internal Revenue Code, and a number of savings plans in international locations. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. We match a portion of each dollar a participant contributes into the plans. Employer-funded retirement benefits for all plans were $1.8 billion, $1.7 billion, and $1.6 billion in fiscal years 2025, 2024, and 2023, respectively, and were expensed as contributed.