Can anyone please explain to me how the vested RSU's are taxed? This is my first time having RSU's vested and 15 unvested turned into 6 vested. I'm in Ontario and that's more than the highest tax bracket so I'm missing something obvious I think.
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Woooowww. Here's some perspective on BC.
When the deal to purchase VMware closed, BC exchanged vested or purchased shares at the rate of 1 VMW share = .2520 AVGO share, with partial shares paid in cash.
BUT, UN-vested RSUs were converted at .201 "rounded down to the nearest whole share". So, the employee doesn't get the full value of the conversion. AND, to add insult to injury, they gave themselves more than 60 days to actually make the payment.
Before you get to the question of tax, there is the question of if and how you get the RSUs. FWIW, read the grant terms of any RSUs you got as a "Retention Bonus" or "Refresh Grant" veeeeerry carefully. Buried in the terms is lots and lots and lots of time to actually PAY the money (interest-free loan, anyone?) and if you are laid off, you don't get the money unless you agree to the severance agreement. So, those RSUs seem to be about something other than compensating good work. If not, getting them would be conditioned on anything more than that.
Taxes bro. They can’t withhold partial shares so they round up
rouding error, you will get the change by the end of March as an extra paycheck
Depends on your country - in my case my home country gets to tax me on the benefit of getting these stocks. But still, automatically some stocks are withheld for tax by Fidelity/ ETrade.
Let’s say I got 3000 USD worth of stock and another 1000 USD worth of stock got withheld/ sold for taxes by ETrade. The 1000 USD I then get back with my next salary, where social security gets deducted on the full 4000 USD benefit. Come tax day, I then pay taxes on the 4000 USD (minus social security).
Which country are you in OP? In the UK you don’t only pay your highest tax rate (45%) you also pay employees (2%) and employers (13.8%) national insurance. This is all documented in Broadcom terms for stock grants and it was the same with VMware.
So you end up losing about 60% to tax. You only get 40% and the tax man gets 60%.
With salary you don’t pay the 13.8% the company does.
Fidelity or ADP website, not Layoff website.
Fidelity loginn to your account and select Accounts & Trade > Documents > Other Documents > Trade Confirmations.