Skip to content
Rubric AdvisorsRubric Advisors
Person looking out at city skyscrapers

Tech Equity Compensation

RSUs, ESPP, and stock at big tech companies

Vests, withholding, trading windows, and leaving: what applies to you, and what to plan for.

Talk to an Advisor

At large public tech companies, most equity pay arrives as restricted stock units (RSUs), often alongside an employee stock purchase plan (ESPP). RSUs are taxed as ordinary income when they vest, withholding is often lower than your actual rate, and trading windows limit when you can sell. The details differ by company, but the questions are the same.

If you work at one of these companies, this applies to you

  • Google
  • Meta
  • Apple
  • Amazon
  • Microsoft
  • Nvidia
  • Salesforce
  • Netflix
  • Adobe
  • Intel
  • Cisco
  • Oracle
  • Uber
  • Airbnb

And most other public technology companies that pay in RSUs. Plan details vary; your plan documents and equity portal are the final word.

Rubric Advisors is not affiliated with, endorsed by, or sponsored by any of the companies named. Company names are trademarks of their respective owners and are used only to identify employers.

RSUs and vesting

  • RSUs usually vest over about four years; some companies vest evenly, others front- or back-load the schedule, and many vest quarterly after an initial period.
  • Each vest is taxed as ordinary income at the share price that day, whether or not you sell.
  • Keeping vested shares is economically similar to buying your employer's stock with that income.
  • Refresh grants often keep new shares vesting every year, so concentration can build quietly.

Withholding gaps

  • Employers typically withhold federal tax on RSU income at the 22% supplemental rate, and 37% on supplemental wages above $1 million in a year.
  • If your marginal rate is higher, you may owe more at tax time; estimated payments or safe-harbor planning can help.
  • State withholding and Social Security and Medicare taxes apply as well.

ESPP

  • Qualified (Section 423) plans can offer up to a 15% discount, often with a lookback to the lower of two prices.
  • Purchases are capped at $25,000 of stock (valued at the offering date) per calendar year.
  • Selling soon after purchase locks in the discount but is taxed differently from holding for a qualifying disposition.

Trading windows and 10b5-1 plans

  • Many employees can only trade during open windows set by the company's insider-trading policy.
  • A 10b5-1 trading plan lets you pre-schedule sales, subject to SEC cooling-off periods; you adopt it, typically with a broker.
  • Having material nonpublic information blocks trading regardless of the window.

401(k) and other benefits

  • Some plans allow after-tax contributions with in-plan Roth conversion (a mega backdoor Roth); check your plan document.
  • Executives may have deferred compensation plans with elections due before the year the pay is earned.
  • Employer stock inside a 401(k) may qualify for net unrealized appreciation treatment in some cases.

Leaving the company

  • Unvested RSUs are generally forfeited when you leave; vested shares remain yours.
  • Incentive stock options generally must be exercised within three months of leaving to keep ISO tax treatment.
  • A departure is a natural moment to revisit old company stock, taking any remaining trading restrictions into account.

Where to go from here

Estimate your withholding gap with the RSU Tax Withholding Calculator, or see the tax cost of selling with the Concentrated Stock Tax Calculator. If most of your net worth is now in one ticker, start with Concentrated Stock; if you are leaving, see Transitioning to Retirement. Terms are defined in our glossary.

Common questions

How are RSUs taxed at big tech companies?
RSUs are taxed as ordinary income when they vest, based on the share price that day, whether or not you sell. Selling later creates a capital gain or loss measured from that vest-date value.
Why do I owe more tax on my RSUs than was withheld?
Employers typically withhold federal tax on RSU income at the 22% supplemental rate, or 37% above $1 million of supplemental wages in a year. If your marginal rate is higher, the difference is due at tax time; estimated payments can help avoid penalties. Confirm with your CPA.
Is an ESPP worth participating in?
Many people participate because qualified plans can offer up to a 15% discount, sometimes with a lookback. Contributions reduce take-home pay, purchases are capped at $25,000 of stock per year, and holding the shares adds more single-company exposure.
What happens to my RSUs if I leave?
Unvested RSUs are generally forfeited when you leave, while vested shares remain yours. Check your grant agreement for exceptions such as acceleration on certain events.

Sources

Educational content only, not personalized investment, tax, or legal advice. Plan terms vary by employer and change over time; confirm details in your plan documents. Rubric Advisors does not prepare tax returns or provide legal advice; tax and legal decisions are made with your CPA and attorney. Because our fee is based on the assets we manage, we have an incentive to recommend that you place more assets with us; see our Form CRS.