Our Approach: From Process to Fees

After advising 380+ tech professionals on RSU strategy, these are the three mistakes we see most often:  Mistake 1 – Treating RSUs as a bonus, not a tax event.  RSUs are taxed as ordinary income at the moment they vest, not when you sell. Many tech professionals are blindsided by a tax bill they did not plan for. Sometimes $30,000–$80,000+  because their employer withheld at a flat rate that did not account for their actual marginal bracket, Medicare Levy Surcharge, or HECS repayments.  Mistake 2 – Holding concentrated stock by default.  Your salary, your career trajectory, and your investment portfolio are all exposed to the same single company. That is not a portfolio – it is a bet. A systematic sell-and-diversify approach almost always produces better long-term outcomes than holding out of habit or inertia. That’s what data tell us every day.   Mistake 3 – Missing the 12-month CGT discount window.  If you hold RSU shares for more than 12 months after vest, any gain above the vest-date price qualifies for a 50% CGT discount. Most tech professionals hold indefinitely (building dangerous concentration). There is a deliberate strategy and most people are not using it.

Yes. Under Australia’s tax rules, RSUs are considered an income tax at vest, not at sale. The market value of the shares on the vest date is treated as ordinary income and added to your taxable income for that financial year regardless of whether you sell.  This catches many tech professionals off guard. If those shares have since fallen in value, you cannot reduce the original income inclusion that is set at the vest date price. You may be able to claim a capital loss when you eventually sell if the price has dropped below your cost base. RSU tax planning needs to happen before your vest date. Once the income event occurs, your options narrow significantly. We usually see more success with clients who plans ahead for vesting events.

This is extremely common. Most employers withhold at a flat rate based on base salary, but they often fail to account for: the RSU income pushing you into a higher marginal bracket, the Medicare Levy Surcharge if your total income crosses the threshold, HECS/HELP repayments triggered by taxable income, or other income outside your primary employment.  To check: add your base salary, any bonus, and the gross value of vested RSUs (shares vested × vest date price). Compare that total against your actual marginal bracket and Medicare Levy. If the total withheld falls short, there is a gap  and you will owe it at tax time.  We model this at the start of each financial year for our clients so there are no surprises at tax time.

This question gets conflated with tax when it is really an investment decision  and separating the two matters. The tax event is already determined at vest regardless of what you do next.  The investment question is different. Holding concentrated employer stock means your income, your career, and your portfolio are all exposed to the same company. A standard investment principle is that you would rarely choose to put this proportion of your net worth into a single stock voluntarily.  For most tech professionals, a systematic sell-to-diversify approach over time is more defensible than holding indefinitely. The right answer depends on your overall financial position, your conviction in the company, and the 12-month CGT discount opportunity which is exactly what we model for clients.

First, understand what you actually have. Most RSU agreements have specific provisions for what happens to unvested grants in the event of redundancy. Some employers accelerate vesting; others cancel unvested shares. Read your equity plan documents carefully and request written confirmation from your HR or equity team if you are uncertain.  Second, review your concentration. If you have recently vested shares, consider whether holding them during a period of corporate uncertainty makes sense given your total exposure to that company.  Third, review your cash position. A layoff affects your income. If you have a significant tax liability from recent vests, make sure you have cash available to meet it before the next lodgement date.  This is exactly the situation where having a plan already in place matters most. If you do not have one, this is the right time to build it.

Yes – if you are an Australian tax resident, have held the shares for more than 12 months from the vest date, and the shares are not held in a company structure.  Your cost base for CGT purposes is the market value of the shares at vest  not zero. If you sell after 12 months for a price higher than the vest date value, only that additional gain qualifies for the 50% discount.

Cross-border RSU situations are among the most complex tax scenarios we manage. The interaction between IRS and ATO rules creates real risk of double taxation if not handled carefully.  The key principle is the ‘source’ of the RSU income – what proportion relates to services performed in the US versus Australia. Most multinational employers use an apportionment formula based on days worked in each country during the vesting period.  Australia and the US have a Double Tax Agreement (DTA) intended to prevent double taxation, but navigating it correctly – including the Foreign Income Tax Offset (FITO) – requires careful analysis of your specific situation, visa status, and residency determination date. We have advised hundreds of US-to-Australia tech professionals on exactly this scenario.