How Your Stock Compensation Gets Taxed

Does your job offer you stock compensation?

Restricted stock units (RSUs) are one of the most common types of equity compensation we see as tax professionals.

RSUs are thought of as a “full value” grant—you receive complete ownership and full value once the vesting period is completed. You don’t have to pay anything like you would with stock options.

So where do the taxes come in? The market value of the RSUs on the vesting date is the amount of taxable compensation to you. The total taxable amount is the market value (stock price) multiplied by the number of shares vested.