RSU vs Salary Calculator
Model your RSU vest schedule: see how much each tranche is worth at vest, how much tax you owe, and your total net proceeds — including the effect of stock price appreciation between grant and vest.
Total net RSU proceeds
$74,024
Gross $127,628 — tax $53,604 = net $74,024 over 4 years.
Total gross value
$127,628
Total tax owed
$53,604
Effective tax rate
42%
Price appreciation
+27.6%
Grant date value
$100,000
Shares per vest
250
- Equal annual vesting: 1000 total shares split evenly, 250.0 shares per year. This models a standard cliff vest; some grants use monthly or quarterly vesting within each year.
- Immediate-sale scenario: Shares are assumed to be sold at vest for the vest-date price. Holding shares after vest adds LTCG exposure on subsequent appreciation (favorable) but also concentration risk.
- RSU vest income is W-2 ordinary income. Federal + state rates are applied to the full gross vest value. FICA (Social Security and Medicare) is not modeled here.
- Share price grows at a constant annual rate — real stock prices are volatile. Use this as a scenario model, not a forecast.
- RSUs and cash salary have identical tax treatment at vest — the after-tax value of $100k in RSUs equals $100k in salary, minus the same marginal rate. The advantage of RSUs is the potential price appreciation before and after vest.
RSUs: your compensation's hidden value
RSUs (Restricted Stock Units) are a growing part of tech and startup compensation. Unlike a salary offer, RSUs don't have a guaranteed dollar value at grant time — their worth depends on your company's stock price when the shares vest. But they can add 20–50% or more to your total compensation, making them one of the most significant parts of a tech offer.
RSUs are taxed as ordinary income at vesting — the fair market value at vest is added to your W-2. If you hold the shares after vesting and they appreciate, the gain is taxed as capital gains. This means RSUs have a dual tax impact: ordinary income tax at vest, then capital gains tax when you sell.
Why it matters to your money
RSUs are often the difference between a good compensation package and a great one. But they come with concentration risk: your income and a significant portion of your wealth are tied to your employer's stock performance. If the company struggles, you could lose both your job and a large chunk of your savings simultaneously. Diversifying RSU proceeds at vest is widely considered one of the smartest financial moves for tech employees.
Read the full guide on starting to invest for advice on what to do with your RSU proceeds once they vest.
Rules of thumb
- Treat RSUs like cash bonus: When they vest, sell immediately, pay your taxes, and diversify the proceeds. This is the financially prudent choice for most employees.
- 4-year vesting is standard: Most tech companies use a 4-year vest schedule with a 1-year cliff (no shares vest in the first year). Total value depends heavily on stock performance between grant and vest.
- Always evaluate RSUs in the context of total compensation: A $150K salary with $50K/year in RSUs is very different from a $200K salary with no equity. Compare total compensation, not just base salary.
Frequently asked questions
- How are RSUs taxed?
- RSUs are taxed as ordinary income at the time of vesting — not when granted. The fair market value at vest is included in your W-2 income. If you then hold the shares and they appreciate, the gain is taxed as capital gains (long-term if held 1+ year).
- What is the difference between RSUs and stock options?
- RSUs have guaranteed value as long as the stock price is above zero — you receive shares regardless. Stock options only have value if the stock price exceeds your strike price. RSUs are less risky but typically offer less upside than options.
- Should I sell RSUs immediately at vest?
- For many employees, the financially prudent answer is yes — to diversify away from company stock concentration risk. Holding employer stock means both your income and your investments depend on your employer's performance. A common rule: treat RSUs like a cash bonus and diversify.