Your RSUs Are Vesting. Here's What to Do Next.

Henry Supinski, ChFC® · 4 min read · April 2026

If you work at a tech company, your RSUs are almost certainly your single largest source of wealth accumulation, and your single largest tax liability. Most tech employees have no plan. Here's a simple framework.

Understand the Tax Event First

When RSUs vest, the value is treated as ordinary income, taxed at your marginal rate. This happens whether you sell or not. By the time you see the shares in your account, the tax is already owed. The decision you need to make is what to do next.

The Concentration Problem

Most tech employees who hold their shares accumulate significant concentration in a single stock. This is a risk management problem, not just a tax problem. The optimal strategy depends on your conviction in the company, your overall financial picture, and your tax situation, not just what feels right.

The Decision Framework

• If you'd buy this stock today with cash, holding makes sense.
• If you wouldn't buy it, ask yourself why you're holding it.
• Diversification strategies exist that can reduce risk without triggering a massive tax event all at once.

One Warning Before the Real Decision

The flat rate most employers withhold at vest often sits well below the actual marginal rate of someone earning a strong salary plus six figures of vesting stock, and the shortfall surfaces as a bill the following April. It deserves its own plan, and we wrote one: why your RSU tax withholding is probably wrong. Get that gap covered, then come back to the question this article is actually about.

Sell at Vest, or Hold?

Your cost basis in vested shares is the price on the vest date. That means selling immediately usually creates little or no additional gain. The income tax was triggered by the vest itself, not by the sale. So holding is not a way to avoid the tax you already owe. It is a fresh investment decision. Would you put this money into this one stock today? Holding does start the clock toward long term capital gains treatment on future appreciation. It also deepens concentration in the same company that already pays your salary. Those two facts sit on opposite sides of the scale, and the right answer depends on your whole financial picture. Consult your tax professional before acting on any specific lot.

How We Approach It

My own SAP vests arrived on the same quarterly rhythm for years, so none of this is theoretical for me. With clients we set a standing policy before each vest date: how much sells at vest, how much is held, where the proceeds go, and how the withholding gap gets covered. A written policy beats a fresh debate every quarter. The full framework lives at SAP RSU financial planning, and most of it applies at any company that pays in stock.

Questions We Hear

If I sell my shares the day they vest, do I owe more tax?

Usually almost none beyond the tax on the vest itself. Your basis equals the vest date price, so a same day sale produces little or no gain. The vest created the income. The sale mostly just converts shares to cash.

Why does my broker's tax form show a cost basis of zero?

Brokers sometimes report zero or incomplete basis on RSU sales. If that number goes on the return uncorrected, the vest income gets taxed twice. The basis should reflect the vest date value that already went through payroll. This is one of the most common RSU errors we see, and it is fixable on the return.

Should I hold shares for a year to get long term capital gains rates?

Only the appreciation after vest qualifies for that treatment. The vest value was already taxed as ordinary income and holding does not change that. So the question is whether the potential rate savings on future gains justifies a year of concentrated single stock risk. Sometimes it does. Often it does not.

How much company stock is too much?

There is no single number that fits everyone. The honest test is the framework above. If the position is large enough that a bad year for the stock would change your retirement date, your housing plans, or your sleep, it deserves a plan rather than inertia.