The 5 Mistakes Tech Employees Make With Their RSUs (and How to Avoid Them)
- Mo Shouman
- 3 days ago
- 4 min read
By Mo, Founder and Principal Adviser – My Wealth Choice, Sydney
Introduction
As more Australian technology companies use Restricted Stock Units (RSUs) and
employee share schemes to reward top performers, we’re seeing a growing number of professionals caught off guard by unexpected tax bills and poor portfolio outcomes.
At My Wealth Choice, we regularly advise clients from companies such as Atlassian,
Microsoft, Canva, Google, and Amazon who find themselves asking the same question:
“I thought RSUs were a bonus ,why did I get hit with such a big tax bill?”
The truth is that RSUs can be a brilliant wealth-building tool or a financial trap, depending on how you manage them. In my 20+ years of experience I found this five most common mistakes tech employees make with their RSUs, and how you can avoid them.
1. Ignoring Tax at Vesting
The biggest misunderstanding about RSUs is when they’re taxed.
Unlike stock options, RSUs are taxed as income when they vest, not when you sell the
shares.
When your RSUs vest, the ATO treats their market value as part of your salary for that
financial year.
This can easily push you into a higher tax bracket — often 45–47% — even if you
haven’t sold a single share.
Example:
If you earn $180,000 a year and $100,000 worth of RSUs vest, your taxable income jumps to $280,000.
If you don’t plan for that, you could face a significant tax bill at tax time.
My Wealth Choice tip:
Using our 3 step Confident Choice System. We help clients forecast their RSU vesting schedule, estimate the upcoming tax liability, and create a “tax buffer” strategy so you’re
never forced to sell shares under pressure just to pay the ATO.
2. Holding Too Much Company Stock
Many employees hold onto all their RSUs out of loyalty or optimism.
But this creates what’s known as concentration risk, having too much of your wealth tied
to one company.
If your employer’s share price falls, your income and your wealth decline together.
Even well-known companies can experience large drops, and those holding only company shares often suffer the most.
My Wealth Choice tip:
We help clients develop diversification strategies selling a portion of vested shares, then reinvesting across sectors and asset classes that reduce risk while maintaining tax efficiency.
3. Selling at the Wrong Time
Timing matters. Selling immediately after vesting can create an unnecessary capital gains tax (CGT) event, while holding for too long could expose you to market volatility.
In Australia:
Selling within 12 months of vesting = full CGT applies.
Selling after 12 months = you may qualify for a 50% CGT discount.
This simple difference in timing can save tens of thousands in tax if planned correctly.
My Wealth Choice tip:
We use tax modelling and CGT forecasting tools to help you determine the optimal holding period and sale timing balancing cashflow, diversification, and tax. Also we help our clients to pay lower tax as low as 10% on those vests.
4. Not Setting Aside Cash for Tax
RSUs create paper income — you’re taxed on the value of shares you may not have sold.
That means your tax liability can arrive months before you have cash to pay it.
Many tech employees end up selling shares at the wrong time (when prices fall) just to meet tax obligations.
My Wealth Choice tip:
At My Wealth Choice, we help clients set up an RSU tax reserve account or automated sale strategy to cover the tax component at vesting.
That way, you never have to scramble for funds or sell under duress.
5. Failing to Coordinate Advice
This one is subtle but crucial.
RSUs sit at the intersection of tax, investing, and personal finance — and yet many employees treat them as isolated events.
They might get tax help from an accountant but no strategic investment advice, or they
invest without considering tax timing.
The result? Missed opportunities and preventable tax bills.
My Wealth Choice tip:
Our approach is integrated, we align your RSU vesting calendar, investment portfolio, and superannuation strategy to ensure every part of your financial life is working together, not against you.
Bonus: A Sixth Mistake — Waiting Too Long to Get Advice
The most expensive RSU mistakes happen when you don’t act early enough.
Once shares vest, your tax position for that year is largely locked in.
Planning before the vesting event gives you the flexibility to make super contributions, prepay deductible expenses, or manage sale timing effectively.
How My Wealth Choice Helps Tech Employees with RSUs
For over two decades, My Wealth Choice has helped Sydney professionals and tech
employees make smarter choices with their money.
Our RSU Planning Service includes:
Vesting and tax projection mapping
CGT discount optimisation
Diversification and reinvestment strategy
Superannuation integration for long-term wealth
As a financial adviser, I see RSUs as both an opportunity and a responsibility. One that demands proactive management and structure.
We combine data-driven analysis with personalised advice to ensure you’re not just earning equity but building wealth from it.
Final Thoughts
RSUs can dramatically accelerate your financial goals or complicate them.
The key difference lies in preparation.
With the right advice and a plan that aligns your tax, investments, and cashflow, you can turn RSUs into a wealth engine rather than a tax headache.
If you work in tech or receive equity-based compensation, now is the time to plan before your next vesting event.
Ready to take control of your RSUs?
📞 Schedule your complimentary RSU Tax & Investment Review with Mo at My Wealth Choice today and learn how to reduce tax, manage concentration risk, and build lasting wealth.
