Your RSUs just vested and the shares landed in your brokerage account. The tax was already handled on payroll (or you owe it on your next return), and now you’re staring at a chunk of your employer’s stock wondering what to do with it. Here’s the honest answer most people don’t want to hear: unless you have a specific, well-reasoned conviction, sell it and diversify. Holding vested RSUs isn’t really “staying invested in a stock you believe in” — it’s making a fresh, active decision to buy more of the one company your salary, bonus, pension and career progression already depend on.
Across most of Europe, RSUs are taxed as employment income at the moment they vest, based on the market value that day. That’s the detail that changes everything. The tax bill is locked in whether you sell or hold. From the vesting date onward, any further gain or loss belongs to the capital gains regime, not the income one. So the shares in your account today are, for tax purposes, functionally identical to cash you just used to buy your employer’s stock on the open market. Framed that way, holding gets a lot less emotional and a lot more mechanical.
This isn’t a warning against equity compensation — RSUs are a genuinely good perk. It’s a warning against accidental concentration. Below: the tax mechanics, the country-by-country wrinkles, and the plan I’d run holding a fresh batch of vested shares.
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With RSUs, there’s no purchase price to worry about the way there is with share options. The value of the shares on the vesting date is added to your taxable employment income for that period, exactly like a cash bonus. Your employer typically withholds tax and social contributions through payroll — often by selling a portion of the shares automatically (sell-to-cover) — though in some countries you self-report and settle the liability through your annual return. Either way, the income tax event is done the moment the shares land in your account.
For the bigger picture, see our European FIRE hub.
From that point forward, only the movement in price between vest and sale falls under capital gains tax, and only on the shares you still hold. Sell everything the same day the shares vest and, in most jurisdictions, there’s little or no capital gain left to tax — you’ve simply converted a stock grant into cash at the value already taxed. Wait six months and the price doubles, and you owe capital gains tax on that extra appreciation too, on top of the income tax already paid at vest. That’s a real bet on the stock, made with money that was already yours.
The double concentration problem
Here’s the part that gets underweighted in most “should I sell my RSUs” conversations. Your income, your bonus, your career capital and often your pension contributions are already tied to your employer’s fortunes. Adding a large slice of investment portfolio in the same company doubles that exposure rather than diversifying it. If the company has a rough year, you can face a pay freeze, a smaller bonus and a falling share price all at once — exactly when you’d most want your savings to be doing the opposite.
This is true even for strong companies. Concentration risk isn’t a comment on quality — plenty of excellent companies go through multi-year stretches of flat or falling prices. A globally diversified UCITS ETF spreads that single-company risk across thousands of businesses instead. If you’ve been holding vested shares “because the company is doing well,” it’s worth reading how a broader shift from single stocks to funds tends to work in practice — I cover the mechanics in moving from stock picking to ETF consolidation.
Country-by-country reality check (approximate, verify locally)
The core principle — tax at vest, capital gains after — holds across most of Europe, but withholding, reporting and timing differ by country. Treat the table below as a starting orientation, not a filing guide; rules move year to year and your employer’s payroll process may differ.
| Country | Tax at vest | Typical withholding | After vest |
|---|---|---|---|
| UK | Income tax + NIC on vest-date value | Sell-to-cover via payroll (PAYE) | CGT on gains above annual exempt amount |
| Germany | Income tax + Soli + social insurance on vest value | Payroll withholding, often sell-to-cover | Abgeltungsteuer (flat capital gains rate) on later gains |
| France | Salary-equivalent tax on vest value (qualifying-plan rules can differ) | Employer withholding, plan-dependent | Flat tax (PFU) or scale on subsequent gains |
| Ireland | Income tax, USC and PRSI on vest value | Employer PAYE, self-reporting can still apply | CGT on gains above the annual exemption |
| Netherlands / Poland | Income tax (box/scale) on vest value | Varies by employer plan | Wealth-tax-style (box 3) or flat CGT depending on jurisdiction |
If your employer withholds via sell-to-cover, they’re already selling a slice of your vest to fund the tax bill — a strong hint about how the system views these shares: income first, investment second. Confirm your own country’s treatment with your national tax authority before you file; UK readers can check HMRC’s guidance on employment-related securities, and German readers can check the Bundeszentralamt für Steuern.
The mechanical sell-and-diversify plan
Once you accept that holding vested RSUs is an active bet rather than a passive default, the plan itself is refreshingly boring:
1. Set an auto-sell instruction where your plan allows it. Many equity plan platforms let you set a standing instruction to sell shares automatically on each vest date. This removes the emotional decision entirely — you’re not “timing” anything, you’re following a rule you set when you weren’t emotionally attached to a specific price.
2. Transfer the proceeds to your regular brokerage account. If your employer’s plan platform isn’t where you want to hold long-term investments, move the cash to the broker you already use. Employees relocating for work or holding US-listed equity comp often find a broker built for cross-border accounts easier to work with — I’ve covered this for expats managing investments across countries.
3. Buy your existing global allocation, not a new one. Don’t treat the proceeds as “new money to research.” Route it into the same broad, low-cost UCITS ETF allocation you already hold or would hold anyway. If you’re not sure which global fund fits, our UCITS ETF comparison tool lets you check TER, replication method and domicile side by side.
4. Phase it in if the amount is large relative to your portfolio. A single large vest can dwarf your existing savings, especially early in a tech career. If deploying it all at once feels uncomfortable, a staged approach over a few months is reasonable — I cover the logic and evidence on lump-sum versus phased investing in investing a lump sum at an all-time high, and the numbers apply whether the lump sum came from a bonus or a vest.
5. Treat repeated vests as a savings plan. If your grant vests quarterly, apply the same rule every time rather than re-litigating it each vest date. Consistency beats cleverness.
ESPP shares deserve the same discipline
If your employer runs an Employee Stock Purchase Plan too, the same logic applies, with one wrinkle: the purchase discount (often 10-15%) is usually taxed as employment income regardless of what you do next, and further price movement is a capital gain. Many people sell ESPP shares quickly to lock in the discount and avoid stacking more single-company exposure on top of RSUs from the same employer.
When keeping some is defensible
I’m not arguing for a hard rule of selling every share the moment it vests. There are reasonable cases for holding a small, deliberate slice: you have genuine insight into the business beyond what’s public, or you’re comfortable treating a small percentage — say 5-10% of total investable assets — as a conviction position you’d hold in any company. The line that matters is between an intentional, sized allocation and shares kept simply because selling felt like betting against your own employer. Those look identical on a statement but are very different decisions.
My verdict: what I’d do
If I vested RSUs tomorrow, I’d set an auto-sell instruction for the vest date (or the next practical trading day), transfer the proceeds to my main brokerage account within the week, and route the cash into the same global equity ETF allocation I already run. If the amount were unusually large relative to my portfolio, I’d phase it over three to six months rather than agonising over the exact day. I’d keep, at most, a small single-digit percentage of my portfolio in employer stock if I genuinely wanted the exposure — sized the same way I’d size any individual stock bet: small enough that being wrong doesn’t hurt.
Frequently asked questions
Q: Do I pay tax twice on RSUs — once at vest and again when I sell?
A: No. You pay income tax and social contributions once, on the market value at vest. Sell immediately and there’s typically little or no additional gain to tax. Hold, and only the further rise is taxed as a capital gain later.
Q: My employer already sells some shares to cover the tax — do I still need to sell the rest?
A: Yes. Sell-to-cover only funds the withholding liability, leaving you holding the remaining net shares. Those still represent fresh concentrated exposure to your employer, so the same sell-and-diversify logic applies to what’s left.
Q: Is it better to hold RSUs for a year to get a lower capital gains rate?
A: Some countries offer reduced rates for longer holding periods, but that saving needs weighing against a full year of single-stock risk you could have diversified away immediately. For most people the concentration risk outweighs a modest rate difference — check your own rules before deciding.
Q: What if my company’s stock keeps going up after I sell?
A: It might, and that’s the trade-off you’re accepting deliberately. The goal isn’t maximising the return on one stock — it’s avoiding your net worth and your paycheque moving together. You’re trading a lottery ticket for steadier compounding.
Q: Should I use the RSU proceeds to pay off debt instead of investing?
A: If you’re carrying high-interest consumer debt, clearing that first usually beats investing the proceeds — the guaranteed “return” from eliminating that interest is hard to match. Low-rate debt like a mortgage becomes a judgment call closer to the lump-sum-investing decision above.
Q: I have RSUs from a US employer but live in Europe — does anything change?
A: The vest-date income tax principle still applies in your country of residence, but double-taxation treaties, US withholding on dividends, and reporting obligations add real complexity. A one-off conversation with a cross-border tax adviser is worth the fee, especially around your first few vests.
This guide is part of our hub on investing a windfall, inheritance or payout — browse the full cluster for related situations.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →