Tech equity
RSU Advice for Tech Executives
Your RSUs vested. Did anyone tell you about the tax bill?
A VP of Engineering came to me after $200K of RSUs vested. Not enough tax was withheld. At 47%, his bill was $94,000. He hadn’t set aside a cent. He’s smart. Nobody had shown him how RSUs work in Australia.
Many of my clients hold $500K to $5M+ in RSUs. At that size, every vest is a tax decision.
The rules
How Are RSUs Taxed in Australia?
In Australia, RSUs are generally taxed when they vest. The full market value on that day is added to your income for the year. It’s taxed at your marginal rate, up to 47% with the Medicare levy.
You haven’t sold anything. You haven’t received any cash. You still owe the tax. Your employer reports it on your ESS statement, and your accountant adds it to your return after 30 June.
After that, the shares are like any other shares. If they rise, you pay capital gains tax on the growth from the vest price. If they fall, you’ve paid income tax on value you no longer have. The ATO explains the taxing point rules here.
The numbers
- RSUs vested: $200,000
- Marginal rate: 47%
- Tax owed: $94,000
- Cash received: $0
Every vest is a tax event. Plan for it before it lands.
What goes wrong
The 3 RSU Mistakes I See Most
None of these are about intelligence. They’re about nobody building a plan around your vest dates.
1. No tax set aside
Often nothing, or not enough, is withheld at vest. The bill turns up a year later, usually when the shares are worth less. Then you sell at the wrong time just to pay it.
2. Holding for the CGT discount
The cost base is the price on the day they vested. If they vested at $50 and you sell at $50 a year later, the discount saved you nothing. If they fell to $30, you held the risk for 12 months and lost money. From 1 July 2027, the 50% discount is replaced with indexation for inflation and a 30% minimum tax on real gains.
3. Too much in one stock
Your salary, your career and now your wealth all depend on one company. You’re not invested. You’re concentrated. In early 2026, some of the biggest tech names fell 40% to 70%.
My rule of thumb
The 33% RSU Rule
Most textbooks say no more than 5% or 10% in one stock. That’s hard to apply when your employer has just given you millions of dollars in shares.
So I use a simpler rule, which the Australian Financial Review quoted in March 2025. Never let one stock be more than a third of your net worth.
If you believe in the company, keep up to a third of each vest. Sell the rest and put it to work somewhere else. You stay invested in the company you work for. You just stop betting everything on it.
Why this works
- You keep real upside if the stock keeps rising
- A 50% fall hurts, but it doesn’t wreck your retirement plan
- No more checking the share price 3 times a day
- It takes market timing out of the decision
How it works
How I Build Your RSU Plan
Three parts. One plan that runs on your vest dates, not on guesswork.
Part 1
A tax smart sell down
Selling within 30 days of vest generally means no capital gains tax, because the sale replaces the vest as the taxing point. I map each vest against your income for the year, set aside the exact tax each quarter, and use your super caps where they help.
Part 2
Diversify the proceeds
The money from each sale gets a job. Global and Australian shares that don’t depend on your employer. Extra super. Paying down the home loan, or debt recycling so your interest becomes tax deductible.
Part 3
A multi year roadmap
I treat your whole vesting schedule as one asset. Every vest for the next 3 to 5 years, the tax on each one, where the proceeds go, and what it all adds up to by the time you want to stop working.
This is general information about how RSUs are taxed. The right sell down plan depends on your income, your super and your goals.
Video
Watch: Do You Have a Tax Problem With Your Employee Share Scheme?
I walk through what happens at vest, and how to stop the tax bill catching you out.
Also worth a watch: 7 Proven Strategies to Cut Tax and Build Wealth for Tech Executives.
Client example
What This Looks Like in Practice
A Sales Director, early 50s, at a US listed tech company in Sydney. A $250K base, $250K to $550K in commission, $1M in shares and $900K in super. RSUs vesting every quarter, with no plan for any of them.
We applied the 33% Rule and set up a quarterly sell down matched to his vest dates. The proceeds paid down the mortgage and went into a diversified portfolio. Then we added a $1 million investment line of credit against his home equity and super contributions for both partners.
See the full case study → or browse all case studies.
The result
$20K
/ month
A clear path to passive income in retirement, with far less riding on one stock.
Results depend on your circumstances. Details changed for privacy.
83 LinkedIn recommendations
What clients say on LinkedIn.
Questions
Frequently Asked Questions
How are RSUs taxed in Australia?
Generally, the full market value of your RSUs is added to your assessable income when they vest, and taxed at your marginal rate, up to 47% including the Medicare levy. Any growth after vesting is taxed as a capital gain when you sell.
Should I sell my RSUs as soon as they vest?
Often, at least partly. Selling within 30 days of vest generally means no capital gains tax, because the sale replaces the vest as the taxing point. My rule of thumb is to keep no more than a third of your net worth in one stock, and sell the rest.
Is it worth holding RSUs for 12 months to get the CGT discount?
Only on the part you’d hold anyway. The discount only applies to growth above the vest price. If the price goes nowhere, it saves you nothing. If it falls, you’ve carried the risk for a year and lost money. From 1 July 2027, the 50% discount is replaced with indexation for inflation and a 30% minimum tax on real gains.
Why didn’t my employer withhold enough tax on my RSUs?
Many employers withhold nothing, or a flat amount that doesn’t match your marginal rate. Either way, the full amount is still assessed when you lodge. That’s why I set aside the exact tax for each vest when it happens.
What should I do with the money from selling RSUs?
Give it a job before it lands. Common options are global and Australian shares, extra super contributions, paying down your home loan, or debt recycling. The right mix depends on your income, super balance and goals.
Do I still need an accountant if I have RSU advice?
Yes. Your accountant lodges your return and your ESS statement. I plan what happens before each vest, so there are no surprises when your accountant sees the numbers.
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