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My company has given me RSUs that will vest this year. I've done some searching on the web and can only find vague information about taxation of these. One site says that they're taxed when they're given to me (a certain amount of shares disappear), another implies I claim them when tax time comes around.

No one seems to state the amount of taxation, either. I understand it's likely not some fixed percentage, but I'm seeing a huge discrepancy. Someone might say they're taxed at 15%, another says 50%.

What's the deal with RSU taxation?

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Restricted Stock Units are different from stock options because instead of buying them at a particular strike price, you receive the actual shares of stock. They are taxed as ordinary income at the time that the restriction is lifted (you don't have to sell them to be taxed). Usually, you can choose to have a percentage of the stock withheld to cover tax withholding or pay for the withholding out of pocket (so you can retain all of your shares).

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  • My experience last time I had RSU's was that the amount needed to cover taxes was sold automatically based on my W-2/payroll deductions, handled like a cash bonus would be.
    – dpassage
    Commented Mar 17, 2017 at 14:30
  • @dpassage Yes, most companies withhold shares by default, and you have to go out of your way to arrange paying for the withholding directly in order to keep the shares.
    – NL - SE listen to your users
    Commented Mar 17, 2017 at 14:40

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