I just vested $500K of RSUs. What now?

The email lands. Your RSUs have vested. $500K of company shares, sitting in your share plan account.

It feels like a windfall. It isn’t, not yet. Close to half of it already belongs to the ATO.

I’ve helped tech executives with their RSUs for years. This is the question I get asked most. Here is the answer I give.

First, how RSUs are taxed in Australia

For most RSUs, the taxing point is generally the day they vest. The market value of the shares on that day is added to your income for the year.

On a $500K vest, at the top rate of 47% including Medicare, that’s about $235K of tax.

Here’s the catch. Australian employers usually don’t withhold tax on RSUs the way they do on salary. The shares land in full, and the bill turns up later at tax time.

Your employer reports the value on your ESS statement after 30 June. After a big year, the ATO may also put you on PAYG instalments for the following year. That’s a second cash hit most people don’t see coming.

I cover the full rules in understanding RSUs in Australia.

The 30 day rule most people miss

If you sell shares within 30 days of the taxing point, the taxing point generally moves to the day you sell. The sale price becomes the amount taxed as income, and there’s no separate capital gain to report.

In plain words: sell inside 30 days and it’s one clean tax event. Hold longer and you may have income tax on the vest value, plus capital gains tax on any growth after it.

My rule: sell 50 to 70% at vest

I never recommend holding the whole vest and hoping. I tell every client to sell 50 to 70% of each vest.

Here’s why, using the $500K example.

• Sell 50% ($250K). That roughly covers the $235K tax bill. Nothing left to diversify.
• Sell 60% ($300K). Tax covered, with about $65K to put to work.
• Sell 70% ($350K). Tax covered, with about $115K to put to work.

Whatever is left sits under one ceiling. No single company should be more than a third of your net worth. I call it the 33% rule, and I’ve explained it in the Australian Financial Review.

Your employer is already paying your salary, your bonus and your unvested shares. That’s a lot of eggs in one basket before you add more.

Where the money goes next

Once the tax is set aside, the cash you’ve freed up has four good homes. The order depends on your situation.

• Pay down your home loan, then redraw it to invest. This is debt recycling. Interest on your home loan isn’t deductible. Interest on money borrowed to invest generally is.
• Top up your super. The concessional cap is $30K a year. If your super balance is under $500K, you may be able to use unused caps from the last 5 years.
• Build a diversified portfolio. Low cost ETFs across Australian and global shares. Not more tech.
• Keep a cash buffer. Six to twelve months of spending in your offset, so the next market fall never forces a sale.

What about the July 2027 CGT change?

From 1 July 2027, the 50% CGT discount is replaced by indexation and a 30% minimum tax on real gains. Growth up to that date keeps the 50% discount, even if you sell later.

So there’s no need to rush a sale because of the rule change. Sell because your plan says so, not because of a date.

A real example

Michael is 50 and sells for CrowdStrike. He had $800K in company shares, vested and unvested, and almost all the family’s wealth sat in the house and one company.

We built an RSU sell down plan, set up a $1M line of credit for debt recycling into shares and ETFs, and modelled $20K a month, indexed, to life expectancy. You can watch the full case study.

Your next step

If you’ve got a vest coming up, get the plan in place before the shares land, not after.

The free RSU Playbook walks through the tax trap, the 33% rule and a sell down plan over several years. If you’d like me to map it to your numbers, see my RSU advice or book a call below.