The Financial Services Authority (OJK) defines stock premium as the excess amount paid by shareholders over the nominal value of the shares after deducting the cost of issuing equity securities. Basically, stock premium can be interpreted as the difference between shareholder deposits and the nominal value of the shares or as a return.

This value is obtained from the difference between the selling price and the purchase price of shares on the capital market. For example, if company A’s shares are sold at a price of IDR 10,000 per share, while the nominal value is IDR 12,000, then the difference of IDR 2,000 is the stock premium. Generally, stock premium appears when an investor buys shares that have just been issued by the issuer during an initial public offering (IPO). The profits obtained from this stock premium are usually not subject to tax deductions so that they are net for investors.