> With RSUs, you are taxed when you receive the shares. Your taxable income is the market value of the shares at vesting.

You pay taxes at date of vest not grant. Small terminology difference, but important - if you sell your RSUs immediately, you never lose $ after taxes.

https://www.schwab.com/public/eac/resources/articles/rsu_fac...

In Europe, you pay taxes, as soon as you get them.

Totally depends on the state. In Ireland you don't pay anything when the stocks are granted to you (you're promised X stocks in Y months), you pay income tax (PAYE) on them when they vest (you receive the stocks) and then you pay capital gain tax (CGT) on the gains (sell price - vest price) when you sell them.

Example: you're granted 1 share today to vest in 1 year. In 1 year the share is worth 100, it vests and you pay PAYE in this (it can either come from your salary, or by selling the stock). If the stock rise to 150 and you sell it after, you pay CGT on 50.

> Example: you're granted 1 share today to vest in 1 year. In 1 year the share is worth 100, it vests and you pay PAYE in this (it can either come from your salary, or by selling the stock). If the stock rise to 150 and you sell it after, you pay CGT on 50.

Huh? Can you actually keep the stock and give revenue the money out of your post-tax? I wasn't aware that was possible.

Yes. To be fair, I never tried it. But my broker (Morgan Stanley) allows you to select how you want to receive them, the default method is "sell to Cover" (sell just enough to pay taxes) but you can also select "Sell All Shares" and "Pay Cash to Cover Taxes".

Huh, interesting. I used Schwab and don't remember ever seeing it. That would definitely have been worthwhile at some point in 2014.

This isn't correct. You pay CGT on the difference between grant and sale

The one loophole is to sell with 4 weeks, that is CGT exempt.

In my part of Europe, you pay on sale, not vest or grant.

Where in Europe?

That hasn't been my experience. RSUs are taxed at vesting in the US.

Actually it can be either way: https://www.cooleygo.com/what-is-a-section-83b-election/#:~:....

83b is offered to very select few and most of us regular folks just don’t have that option. Either way it would be a terrible thing to pay tax at time of grant and the stock takes a hit.

This varies widely country by country. I think your case applies to Germany. Most of the Nordic pays tax on value at vesting afaik.

This doesn't sound right. You pay taxes when they vest, not when they are granted.

It depends on the country and tax law. What you said is true for the US.

This isn't true for RSUs in the USA. You're taxed on the value at the time when you receive them.

It's taxed at vest time.

Most people should always just sell the stock immediately to cover tax burden. I mean, do whatever you want, but why set yourself up for tax liability risk at all. There are tons of other good investments out there that will mitigate concentration risk.

If there's actually a strong fundamental basis for upside (not 10x sales fantasy valuation), it could be prudent to hold in some cases

Isn't the tax already withheld at the time of vest? I mean sure at some point your tax rate is going to be much higher than the withholding rate so you end up paying extra over it.

Concentration is the real risk. I know many people at Apple and Microsoft whose only investment is their company stock. It has worked out well for them but they're just one big scandal away from disaster.

No tax is withheld at vest time. At least in the majority of cases/usually.

Holding vested RSUs is only wise if your conviction is that the company you work for is the best investment available at the time.

You can easily sell them and invest in other stocks instead, which reduces your risks substantially

> No tax is withheld at vest time. At least in the majority of cases/usually.

My last two employers deducted shares at vest as tax. This is in US, btw. I am surprised it isn't the common practice. The only problem was that the withholding rate was too low for my effective tax rate which means I always have to pay estimated taxes.

Google and Facebook both deduct shares at vest. The default is something like 25%, which isn’t too far off from most folks’ effective tax rates. Yet, base comp tends to be withheld at marginal rates; so if you don’t change anything, you can still end up owing a decent amount.

> The default is something like 25%

Default withholding has been 22% now for a few years. I bring this up because the gap between default withholding and the higher marginal rates has widened compared to the years it was at 25%.

> Yet, base comp tends to be withheld at marginal rates

To clarify, default withholding on base pay uses your bottom tax rates. It assumes you have no other income, so it will calculate based on standard deduction, 10%, 12%, then working upwards. So I wouldn't use the word "marginal" to refer to base pay because most people understand that as their top tax rates.

This means that for bonus, stock, and other compensation, it's reasonable to increase withholding to reflect the top tax rates.

> most folks’ effective tax rates

A bit of an aside, but I'm not a big fan of the idea of "effective tax rates". It's not a term the IRS uses, but something that tax software companies like to push for whatever reason. You also can't do much with it in practice: regarding withholding, it's not useful and potentially confusing.

Thank you for the correction, and yes I agree with everything you wrote!