How are Google RSUs taxed at vesting and sale?
By Vaibhav Goel, registered financial advisor (SEC record) · Formerly a product director at DoorDash, ex-Google, ex-Microsoft · LinkedIn
Updated September 17, 2026
Twice, on two different things. The shares are wage income the day they vest, at that day’s price. Whatever the stock does afterward is a capital gain or loss when you sell. Holding for a year does not turn the original income into capital gains.
How the tax works
The IRS treats the vest as wage income and the later sale as a capital gain or loss against that basis.[3][5] With numbers:
Worked example / 100 shares
100 shares × $200
$20,000
Wage income the day it vests
Later sold at $230
$23,000
Sale proceeds before fees
$23,000 − $20,000
$3,000
Capital gain on that basis
Assumes all 100 shares are kept. Excludes withholding, fees, and basis adjustments.
What actually lands in your account
Google does not sell shares to cover your tax. Alphabet issues the vested shares net of statutory withholding, so the tax comes out in shares before anything reaches you.[2] The same 100 GSUs, followed through:
- 01
100 GSUs vest
$20,000 of wages at $200 a share, on your W-2.
- 02
22 shares withheld
Federal supplemental withholding at 22%, $4,400. State and payroll taxes take more in most states.
- 03
≈78 shares delivered
Fewer in California. These are the shares you can sell or hold, with a $200 basis each.
- 04
You may still owe
At a 35% or 37% bracket, 22% was a deposit, not the bill.
Illustration at the federal supplemental rate only, which applies up to $1 million of supplemental wages in a year.[4] The share count Google withholds depends on the statutory rates for where you work.
Before a large vest: take your year-to-date paystub, expected remaining compensation, withholding elections, and last year’s return to whoever does your taxes. Raising payroll withholding on salary is usually easier than an estimated payment later.
Following the shares through your paperwork
Award statement
The grant, units settled, price used, shares withheld, and shares delivered. One per vest; keep them all.
Paystub and W-2
The vest is in Box 1 wages and the withheld shares are in the tax boxes, already run through payroll.
1099-B and supplement
Sale proceeds and the broker’s basis. Brokers may not add compensation income to the basis they report on awards granted after 2013, so the reported basis is often low or zero.
Form 8949
Where that basis is corrected with the supplement, so the $20,000 you were taxed on at vest is not taxed again as gain.
The broker basis rule is in the 1099-B and Form 8949 instructions.[18][22]
Two things specific to Google
- Dividend equivalents. Alphabet’s $0.22 quarterly dividend reaches unvested GSUs as extra GSUs that vest with the award, so they are taxed as the shares they ride on, not as dividends, until they settle.[21][10]
- Pre-split lots. Shares that vested before the 20-for-one split on July 15, 2022 carry a per-share basis one twentieth of the pre-split figure. Check the lot before you sell it.[34]
Sources for this section
- Alphabet: 2025 Form 10-K [2]
- IRS Publication 525: taxable and nontaxable income [3]
- IRS Publication 15 (2026): supplemental wages [4]
- IRS Topic 409: capital gains and losses [5]
- IRS: 2026 Form 1099-B instructions [18]
- IRS Publication 505 (2026): withholding and estimated tax [19]
- IRS: Form 8949 instructions [22]
- Alphabet: Form 10-Q for the quarter ended June 30, 2022 [34]
A common question
Does waiting a year to sell eliminate the income tax on RSUs?
No. The share value is wage income the day it vests. Holding longer only changes how the gain or loss after that day is treated, not the original income.
Connect this to your wider plan
Meet your financial advisor
Simple Money Advisors LLC is a California state-registered investment adviser.
Vaibhav Goel
Co-founder of Simple Money · Registered financial advisor · SEC record
Investment adviser representative, registered with the State of California.
Vaibhav spent fifteen years building products at Google, DoorDash and Microsoft before becoming a licensed advisor. He works with people in tech on the whole picture, equity, taxes, investments and cash flow, as one plan rather than four.
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