Equity compensation
RSUs Just Vested — Sell Now or Hold?
The instinct is to hold, because selling feels like giving up on the company. But the tax has already happened. On vest day you own cash that has been converted into stock without you choosing to buy it.
The short answer
Ask one question: if the vest had paid out in cash, would you have bought $80,000 of your employer’s stock with it? If not, sell. Holding is not neutral — it is an active purchase decision you are making by default, and it concentrates 24% of a $330,000 portfolio in the same company that pays your salary.
What actually happened on vest day
| Event | Amount |
|---|---|
| Shares vested | $80,000 of value |
| Taxed as ordinary income, in full, on vest | $80,000 |
| Withheld at the 22% supplemental rate | $17,600 |
| Net shares delivered | $62,400 |
| Your cost basis in those shares | the vest-day price |
| Gain or loss if you sell today | approximately zero |
Because the cost basis is the vest-day price, selling immediately is very close to a no-tax event. There is no tax reason to hold and almost no tax cost to selling. That is the opposite of how stock options work, and it is why the two get confused.
The withholding is usually not enough
| Your marginal federal rate | Withheld at 22% | Shortfall on the vest |
|---|---|---|
| 22% | $17,600 | $0 |
| 32% | $17,600 | $8,000 |
| 35% | $17,600 | $10,400 |
| 37% | $17,600 | $12,000 |
The 22% supplemental rate is a flat default, not a calculation of what you owe. If the vest pushes you into a higher bracket — which is the usual case for anyone receiving an $80,000 vest — the difference is due at filing. Setting it aside on vest day is the single most useful thing to do with the proceeds.
The concentration you are choosing
| Before the vest | After, if you hold | |
|---|---|---|
| Other investments | $250,000 | $250,000 |
| Employer stock | $0 | $80,000 |
| Total | $250,000 | $330,000 |
| Share in one company | 0% | 24.2% |
| Share of your income from that company | 100% | 100% |
This is the part the tax discussion hides. Your salary, your next vest and now a quarter of your portfolio all depend on one company performing. A bad year at that company hits all three at once, which is precisely when you would need the portfolio to hold up.
What holding has to earn to be worth it
| Scenario over the next 12 months | Effect on $80,000 |
|---|---|
| Stock rises 20% | +$16,000 gain, taxed at long-term rates once past 12 months |
| Stock flat | No gain; 12 months of concentration risk for nothing |
| Stock falls 20% | −$16,000 |
| Stock falls 30% | −$24,000 |
Holding for 12 months converts a future gain from short-term to long-term rates — on a $16,000 gain that is worth about $2,720 at a 32% versus 15% rate. It is a real saving, and it is smaller than a single bad quarter.
What this assumes
- An $80,000 vest and a $250,000 portfolio outside employer stock.
- The 22% federal supplemental withholding rate, which applies to supplemental wages up to $1M.
- A 15% long-term capital gains rate and a 32% marginal ordinary rate in the comparison above.
- No state tax modelled — several states withhold at their own supplemental rate on top.
- No trading window, blackout period or company holding requirement. Check yours before acting.
Every one of these is an input, not a fact about your situation. Change them in the calculators below and the answer changes with them.
Run the math yourself
These calculators give you the same numbers we used above — with your own inputs.
Bottom line
Decide a rule before the next vest rather than a judgement after it: sell on vest, keep a fixed percentage, or hold to the 12-month mark — any of them beats deciding in the moment. Set aside the withholding shortfall the same day. If you do hold, hold deliberately, and size it as though you had bought the position on purpose, because you did.
Disclaimer. This is educational, not personalized financial advice. Numbers depend on your specific tax bracket, state, and goals. Verify with the IRS, SSA, or a CPA before acting. See our Financial Disclaimer.
Goes deeper on this
The Tech Workers Equity Comp Handbook (2026 Edition)
Equity compensation is often the largest and least-understood part of a tech worker's pay. The Tech Worker's Equity Comp Handbook fixes that, built on current 2026 tax law.By the last page y
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