Restricted Stock Units (RSU’s) can be one of the most valuable and confusing parts of your overall compensation package. For many professionals, RSU’s quietly grow into a significant portion of their net worth, often without a clear strategy in place.
If you receive RSU’s, the key question isn’t whether they’re valuable it’s what you should do with them.
This article explains what RSU’s are, how they work, the key tax considerations (which depend on where you live), and how to decide what to do when they start to build up.
What are Restricted Stock Units (RSU’s)?
Restricted Stock Units are shares in your employer’s company that are awarded to you as part of your compensation, but with restrictions attached.
You don’t own RSU’s outright when they are granted. Instead, they become yours over time through a process called vesting.
Once vested, RSU’s are treated as:
- Your shares to keep, sell, or reinvest
- Employment income for tax purposes
RSU’s are commonly used by companies to attract, retain, and reward key employees, particularly in fast-growing or publicly listed businesses.
How do RSU’s work?
When RSU’s are awarded, you’ll usually receive:
- A grant date (when the RSU’s are promised)
- A vesting schedule (when you actually receive the shares)
Common vesting structures include:
- Annual vesting (e.g. 25% per year over four years)
- Quarterly vesting after an initial “cliff”
- Performance-based vesting linked to company or personal targets
Once RSU’s vest:
- The shares become yours
- Their value is treated as income
- Tax might be due, even if you don’t sell the shares
Many employers automatically sell some shares at vesting to cover tax, but this does not always cover the full liability.
Which industries most commonly offer RSU’s?
RSU’s are most frequently seen in industries where competition for talent is high and long-term incentives matter.
Common industries include:
- Technology and software
- Big Tech and multinational corporations
- Financial services and fintech
- Pharmaceuticals and life sciences
- Biotech and medical devices
- Engineering and manufacturing
- Professional services and consulting
- High-growth start-ups and scale-ups
If you work for a global company or are internationally mobile, RSU’s often come with additional complexity.
How are RSU’s taxed?
RSU taxation depends heavily on the country you live in, where you work, and sometimes where the company is based.
In general:
- RSU’s are taxed as employment income when they vest
- Income tax, payroll taxes, and social security may apply
- Future gains after vesting may be subject to capital gains tax
For internationally mobile individuals, RSU taxation can span:
- Multiple tax years
- Multiple countries
- Different currencies
This makes planning essential.
A critical consideration: US Federal Estate Tax on American RSU’s
If your RSU’s are in US-listed companies, there is an often-overlooked issue: US Federal Estate Tax.
Non-US individuals who hold US-situated assets (including US shares) may be exposed to US estate tax on death, even if they do not live in the United States.
Key points to be aware of:
- US shares are generally considered US-situs assets
- Estate tax exposure depends on your residency, domicile, and applicable tax treaties
- The rules are complex and can change over time
This is particularly important for:
- Expats
- Non-US citizens working for US companies
- Individuals building large RSU portfolios over many years
Ignoring this risk can result in unexpected tax consequences for your family.
What should I do if I have too many RSU’s?
A common mistake is doing nothing and allowing RSU’s to accumulate.
This often leads to concentration risk, where:
- Your salary comes from one company
- Your bonus comes from the same company
- Your RSU’s are invested in that company
When too much of your wealth depends on one employer, your financial risk increases significantly.
A structured RSU strategy may include:
- Selling some or all RSU’s on vesting
- Rebalancing to reduce employer stock exposure
- Using RSU proceeds to fund long-term investments
- Aligning RSU decisions with retirement, property, or lifestyle goals
The goal is not to avoid risk – it’s to manage it intelligently.
RSU’s should be part of a wider financial plan
RSU’s don’t exist in isolation. They should be coordinated with:
- Your investment portfolio
- Pension and retirement planning
- Cash flow and savings
- Tax planning across jurisdictions
- Estate and succession planning
Without a plan, RSU’s can create unnecessary tax bills, cash flow issues, and hidden risks.
How we can help
We specialise in helping internationally mobile professionals and expats make smart decisions with complex compensation, including RSU’s.
We can help you:
- Understand how your RSU’s are taxed where you live
- Assess concentration risk and employer exposure
- Build a clear sell and reinvestment strategy
- Integrate RSU’s into your wider financial plan
- Address cross-border and estate tax considerations
If you receive RSU’s and want clarity, control, and confidence in your decisions, professional advice can make a meaningful difference.
RSU’s can be a powerful wealth-building tool – when managed with intention.
Book a Call to Review you Situation
Important Disclaimer
This article is for general information purposes only and does not constitute financial, investment, or tax advice. Tax treatment and financial outcomes depend on individual circumstances and the country in which you live.
You should always seek guidance from a qualified tax adviser or regulated financial adviser before making decisions relating to Restricted Stock Units or any other investments.
