RSUs in Ireland: What You Actually Keep, and What It Costs You

Equity compensation has been one of the best wealth builders of the past decade. It is also the most reliable way to end up with a large net worth and no freedom, because roughly half of every vest goes to Revenue and most of what is left stays in a single stock.

There is a pattern among senior people at large technology employers in Ireland. Net worth climbs. Income climbs. Lifestyle climbs. And financial freedom quietly moves in the opposite direction, because a growing share of the balance sheet is tied to the same company that pays the salary, provides the benefits, and can end the arrangement at short notice.

That is not diversification. It is a leveraged position in one corporate entity, held by someone whose employment income is also a claim on it.

The audit worth doing first

Take your net worth. Subtract all unvested equity, any vested stock you would not sell today, and anything tied directly to your employer. What is left, and how long would it fund your life?

An illustrative case. An engineering manager, 38, on €450,000 total compensation — €180,000 base, the rest in RSUs. House equity €250,000, pension €180,000, vested company stock €600,000, unvested RSUs worth €800,000.

The headline is €1.83 million. But the unvested €800,000 is contingent compensation, not wealth — it pays only if you stay. Count only what is actually yours and the figure is €1.03 million, of which €600,000 is a single stock and €180,000 is inaccessible until at least 50.

Freedom is not net worth. It is liquidity that does not depend on your employer — and that is the number almost nobody calculates.

Then look at spending. A €4,000 mortgage, €2,000 of school fees and €1,500 of car costs is €90,000 a year before food, utilities, holidays or anything else. Realistically that household spends €140,000. On €600,000 of stock, after capital gains tax on disposal, that is roughly four years of runway — every euro of it in the shares of the employer who just made them redundant.

What actually happens at vest

When RSUs vest, Ireland treats the full market value as employment income on that date. Not a capital gain. Income, through payroll, at your marginal rate.

500 SHARES VESTING AT €100, TOP-RATE TAXPAYER

Charge Rate Amount

Income tax 40% €20,000

USC 8% €4,000

PRSI 4.2% €2,100

Total 52.2% €26,100

Most employers operate sell-to-cover: 261 of the 500 shares are sold automatically to settle the bill, leaving you 239. Your base cost for capital gains purposes is €100 per share — the value at vest.

One change worth knowing, because it removed a trap that used to catch people badly. Until the end of 2023, unapproved share options were taxed under self-assessment: you had to file a Form RTSO1 and pay within thirty days of exercise. From 1 January 2024 that system was abolished and share option gains, like RSUs and ESPP discounts, are collected through payroll by your employer.

The part that is still yours to handle

Income tax at vest is your employer’s problem. Capital gains tax on disposal is entirely yours, and this is where people come unstuck.

Hold those 239 shares and sell two years later at €200. The gain is €100 a share, or €23,900. After the €1,270 annual exemption, €22,630 is taxed at 33% — about €7,468. Across the whole life of that grant you have paid roughly €33,568 on total value of €73,900: an effective rate of about 45%.

Three practical points that matter more than the arithmetic.

• The payment deadline comes long before the filing deadline. For disposals between 1 January and 30 November, CGT is payable by 15 December of the same year. For December disposals, by 31 January following. The return itself is not due until 31 October of the following year — which is why people who assume one date discover they missed the other.

• Currency moves are part of the calculation. Most of this stock is denominated in dollars. Your base cost is the euro value at vest and your proceeds are the euro value at sale, so exchange rate movement between the two dates changes your gain even where the share price has not moved at all.

• Revenue already knows. Employers file an annual return of share scheme activity. Unreported disposals are not invisible, and late payment attracts daily interest of roughly 8% a year on top of the tax.

Reducing the bill legitimately

Splitting disposals across tax years uses two annual exemptions rather than one — selling in December and again in January is worth €1,270 of additional exempt gain. Transfers between spouses are exempt from CGT, so shares moved to a spouse who then sells in their own right bring a second €1,270 exemption into play; note that the exemption itself is personal and cannot simply be pooled, and check whether your plan permits the transfer before relying on it.

Pension contributions in heavy vesting years are the most powerful of the three, but the limits are tighter than usually stated. Relief is capped at an age-related percentage of earnings, subject to a €115,000 earnings cap: 20% between 30 and 39, 25% between 40 and 49, 30% from 50. For our 38-year-old that is a maximum relievable personal contribution of €23,000 — worth about €9,200 at the marginal rate, not the €40,000 contribution and €16,000 saving often quoted. Employer contributions to an occupational scheme sit under different rules and are worth examining separately.

Why concentration is the larger problem

Hendrik Bessembinder’s analysis of US stocks since 1926 found that the majority of individual listed companies underperformed Treasury bills over their lifetimes, and that a small minority — on the order of 4% — accounted for essentially all net wealth creation. Holding a concentrated position is a bet that your employer is in that group. It may be. But it is a bet, not a plan.

The mechanics are unforgiving in a way that is easy to see once written down. At 15% concentration, a 50% fall in the stock costs you 7.5% of the portfolio. At 30% it costs 15%. At 50% it costs 25%. Above 70% you no longer have a portfolio, you have a single point of failure — and it is the same point of failure as your salary, your health cover and your pension contributions.

A single stock also typically runs at two to three times the volatility of a diversified portfolio, and higher variance mechanically reduces compounded returns even where the average return is identical.

Selling without trying to time it

Everyone understands the argument and almost nobody acts on it, because selling requires picking a day. Up on Monday, so you wait. Down on Tuesday, so you wait for a recovery. Six months later nothing has been sold.

The fix is to make the decision once and then stop making it. Set the target — say 15% of investable assets. Calculate the amount to sell. Divide it across a fixed period of twelve or eighteen months. Then pick a date, the second Monday or the fifteenth, and sell that euro amount on that date regardless of what the price has done.

Selling a fixed euro amount rather than a fixed number of shares matters. When the stock is up you sell fewer shares and keep more upside; when it is down you sell more and de-risk faster. The objective is to reduce the percentage of your net worth in one company, not to maximise the sale price.

The schedule removes regret in both directions: you cannot have sold at the wrong moment if you sold at every moment.

If you are subject to trading windows or blackout periods, the schedule has to be built around them and may need to run on quarterly windows rather than monthly dates. That is a constraint on execution, not a reason to defer the decision.

The sequence that works

Liquidity first. Before holding any concentrated position, build two to three years of expenditure in cash and diversified assets outside your employer. Until that exists, sell RSUs as they vest — the tax is already paid, so holding is an active decision to buy the stock, not a passive one.

Then set guardrails. Fifteen to twenty per cent of investable assets in company stock, checked quarterly, with a systematic reduction triggered whenever growth pushes it past the ceiling. That keeps you participating in the upside without letting the position become structural again.

And control the spending. Someone on €450,000 spending €400,000 is trapped regardless of how the stock performs. The gap between income and outgoings is the freedom, not the headline number.

The reframe that makes all of this easier: the moment RSUs vest, you are no longer making a loyalty decision. You are making an investment decision. If you would not take €600,000 in cash and put all of it into your employer’s shares, you should not hold the equivalent position simply because it arrived that way.

Frequently asked questions

How are RSUs taxed in Ireland?

The full market value at vest is treated as employment income and taxed through payroll at your marginal rate — income tax, USC and PRSI, up to roughly 52% for a higher earner. Your base cost for capital gains purposes is the value at vest, so any subsequent growth is taxed separately at 33% when you sell.

When do I have to pay CGT on shares in Ireland?

For disposals between 1 January and 30 November, payment is due by 15 December of the same year. For disposals in December, by 31 January following. The return is not due until 31 October of the following year, so the payment deadline arrives first and is the one people miss.

Do I still need to file an RTSO1 for share options?

No. The RTSO self-assessment system was abolished from 1 January 2024. Gains on the exercise of unapproved share options are now collected by your employer through payroll, in line with the treatment of RSUs and ESPP discounts.

How much company stock is too much?

A common working ceiling is 15 to 20% of investable assets. At 15%, a halving of the share price costs 7.5% of the portfolio. At 50% it costs 25% — and it arrives at the same time as the risk to your salary, benefits and future grants, because all of them depend on the same employer.