How RSUs Are Taxed in Australia (A Guide for Tech Employees)

By Mo, Founder and Principal Adviser – My Wealth Choice, Sydney

Introduction

If you’re an employee at a major tech company like Atlassian, Canva, or Amazon, you’ve probably received Restricted Stock Units (RSUs) as part of your compensation. RSUs can be an excellent way to build long-term wealth but they can also create confusion and unexpected tax bills if you fail to plan properly.

At My Wealth Choice, we regularly meet tech professionals who are surprised to learn

that their RSUs are taxed differently from their regular salary, and often at much higher

rates than expected. This article will walk you through how RSUs are taxed in Australia,

when that tax applies, and what smart strategies can help you manage or reduce it

legally.

What Are RSUs?

Restricted Stock Units (RSUs) are shares your employer grants you as part of your total

remuneration. They are “restricted” because you don’t own them until they vest. That is,

until a certain period has passed or performance conditions are met.

Once vested, those shares are transferred to you, and from that moment, the Australian

Taxation Office (ATO) treats the value of the RSUs as assessable income( similar to your wage).

In plain English: when your RSUs vest, the market value of those shares is added to your salary for that financial year and taxed at your marginal rate.

When Are RSUs Taxed in Australia?

In Australia, the critical tax event for RSUs is vesting, not the grant date.

At vesting:

• The value of the shares becomes taxable as income.

• Your employer may withhold some shares or cash to cover Pay-As-You-Go (PAYG) tax obligations.

• The taxed amount appears on your income statement (accessible via myGov) as part of your employment income.

Once vested, the shares are now yours, and any future gain or loss will fall under capital gains tax (CGT) rules when you decide to sell them.

Example: The Vesting Tax Trap

Let’s imagine Sarah, a senior engineer at Atlassian, receives 1,000 RSUs that vest in June 2025 when the share price is $150.

• Market value at vesting: 1,000 × $150 = $150,000

• Taxed as income: $150,000 added to her salary

• If she earns $180,000 salary, her total assessable income becomes $330,000

• The additional RSU income is taxed at the top marginal rate (47%), potentially adding around $70,500 in tax

Unless Sarah plans, she could face a large tax bill even if she hasn’t sold any shares yet.

After Vesting: Capital Gains Tax (CGT)

Once the shares are vested, any increase or decrease in value between vesting and sale is treated as a capital gain or loss.

If Sarah holds her shares and the price later rises to $200, the $50 gain per share is a capital gain.

• If she sells within 12 months → full CGT applies.

• If she holds for over 12 months → she may receive a 50% CGT discount, meaning she’s only taxed on half the gain.

  
  

This is where timing and strategy become crucial. Something we help clients at My Wealth Choice plan carefully. By using our 3 steps Confident Choice System we help tech professionals avoid few common mistakes that cost them 100’s of thousands of dollars.

Common Mistakes Employees Make

1. Not preparing for tax at vesting: Many tech employees don’t set aside enough cash for the tax bill when shares vest.

2. Holding too many company shares: Concentration risk, if your employer’s share price drops, so does your wealth.

3. Selling too early: Triggering higher CGT or missing out on the 12-month discount.

4. Not tracking multiple vesting dates: Overlapping RSU tranches can create a confusing tax timeline.

5. No coordinated strategy: Without synchronising your RSUs, salary, and superannuation, you can easily overpay in tax.

6. Holding company shares in the wrong structure: Planning to own your company shares can reduce taxes from 47% to 10% and sometimes even 0%.

Legal and Smart Ways to Reduce RSU Tax

There’s no way to completely avoid tax on RSUs — and nor should you try — but there

are legitimate, proven strategies to reduce and manage the impact:

1. Superannuation Contributions: Salary-sacrifice or concessional contributions can reduce your taxable income in the same year as your RSUs vest.

2. Tax Timing: Planning for vesting sales across financial years can lower the effective tax rate.

3. Diversification Strategies: Selling some RSUs at vesting and reinvesting can spread CGT events.

4. CGT Discount: Holding vested shares for over 12 months before selling can halve your capital gains tax on profits.

5. Structuring Advice: For high-income earners, a professional adviser can explore structures (family members, trusts, company holdings) that improve long-term tax efficiency.

At My Wealth Choice, through our 3 steps Confident Choice System. We work closely with clients’ accountants to model the optimal timing and structure balancing cashflow, tax and risk.

ATO Reporting and Record Keeping

Always keep accurate records of:

• Vesting dates

• Number of shares vested and sold

• Market price at vesting

• Sale price and date

This documentation is vital for both income reporting and CGT calculations.

Your employer will typically provide an Employee Share Scheme (ESS) statement, which you must declare in your tax return.

How My Wealth Choice Helps Tech Employees

With more than 20 years of financial advisory experience, I’ve seen hundreds of Australians — particularly those in the technology and corporate sectors — misunderstand how RSUs fit into their overall wealth plan.

We do that using my 3-step system called Confident Choice System. The Confident Choice System is a 3-step roadmap engineered to help tech professionals crush the three biggest pain points keeping tech professionals awake at night:

1. Skyhigh tax bills (and the nagging worry that the higher you climb and the better you do, the more you’ll hand over to the ATO…)

2. No coherent wealth strategy (and feeling like you should be further ahead or doing more with your money…),

3. May be most importantly, wanting to speak to someone who can help but not being sure who to TRUST or someone who knows the ins and out for people in their situation (the IT and tech profession is ‘nuanced’ and quite specific compared to many more vanilla situations…).

At My Wealth Choice, we specialise in:

• RSU tax planning and timing strategies

• Equity compensation management

• Tax-effective investment reinvestment

• Superannuation integration

Our focus is on helping you keep more of what you earn and grow wealth strategically, not reactively.

Final Thoughts

RSUs are a powerful wealth-building tool, but they demand careful tax planning. If you’ve received RSUs or expect a vesting event soon, the best time to act is before the shares vest — not after.

A tailored RSU strategy can prevent unwanted tax shocks, unlock CGT opportunities, and help you convert equity into lasting wealth.

Ready to take control of your RSUs?

📞 Book your complimentary RSU Tax Strategy Session with Mo at My Wealth Choice and learn how to reduce tax, diversify smartly, and turn your equity into real wealth.

BOOK HERE