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RSU Vestings and Tax: What £100k+ Tech Workers Need to Know

Restricted Stock Unit vestings count as taxable employment income. If they push your ANI over £100,000, you may hit the 60% trap without realising it.

CG
CliffGuard Team · Updated 13 April 2026 · 6 min read

This guide uses 2026/27 tax year rules unless stated otherwise. Scottish rates and childcare rules can differ.

?Quick answer

RSU vestings are taxed as employment income at the market value on the date they vest. This amount is added to your gross salary for PAYE purposes and counts towards your Adjusted Net Income. If your base salary is below £100,000 but RSU vestings push your total above it, you could lose Personal Allowance and potentially TFC eligibility.

How RSUs are taxed in the UK

When your RSUs vest, the market value of the shares on the vesting date is treated as employment income. Your employer reports this through PAYE and deducts income tax, National Insurance and (if applicable) student loan repayments.

You may not receive every share that vests. Many employers sell or withhold some shares straight away to cover PAYE tax and National Insurance.

This means:

  • The vesting value appears on your P60 alongside your salary
  • It is included in your ANI calculation
  • It counts towards the £100,000 Personal Allowance taper threshold
  • It counts towards the £60,000 HICBC threshold

The surprise £100k trap

Many tech workers have a base salary in the £70,000-£95,000 range but receive RSU grants that vest throughout the year. If your base is £90,000 and £20,000 of RSUs vest in the tax year, your ANI is £110,000.

Suddenly you are in the 60% trap: paying 60% marginal tax, losing Personal Allowance and potentially losing Tax-Free Childcare.

The challenge is that RSU vesting values are unpredictable because they depend on the share price at the time of vesting. A good year for the share price can push you over £100,000 unexpectedly.

What to do: model your expected vestings in CliffGuard at the start of the tax year. Use a conservative and an optimistic share price estimate. Then set up pension contributions to keep your ANI below £100,000 under both scenarios.

Planning around RSU vestings

Practical steps for RSU recipients:

  1. Check your vesting schedule: know when and how many shares vest each quarter
  2. Estimate the taxable value: multiply shares by expected share price
  3. Add to your base salary and any other income to estimate ANI
  4. Increase pension contributions if your ANI is likely to exceed £100,000
  5. Review after each vesting: adjust SIPP contributions before the end of the tax year

Salary sacrifice is ideal for the predictable portion. A SIPP top-up near year-end lets you fine-tune once you know the actual vesting values.

If you keep the shares after they vest and later sell them for more than their value at vesting, there may also be Capital Gains Tax to think about.

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Frequently asked questions

Do RSUs count as salary?

RSUs are not salary in the traditional sense, but when they vest they are taxed as employment income. The vesting value is added to your P60 figure and counts towards your ANI, PAYE and National Insurance in the same way as cash earnings.

Why is my P60 higher than my cash pay?

Your P60 includes all taxable employment income, not just cash. If RSUs vested during the year, their market value at vesting is included. This is why your P60 can be significantly higher than the cash salary you actually received.

What happens if I keep the shares and sell later?

If you sell the shares for more than their value at the date of vesting, the profit may be subject to Capital Gains Tax. You have a separate Capital Gains Tax annual exempt amount. If you sell immediately at vesting, there is usually no additional gain and therefore no CGT.

Are RSUs taxed twice if I also pay Capital Gains Tax when I sell?

No. You pay income tax on the value at vesting. If you sell later at a higher price, you pay CGT only on the gain above the vesting price. The two taxes apply to different amounts.

Can I salary sacrifice the RSU income?

Not directly. RSU vestings are not regular salary and cannot be salary-sacrificed. However, you can increase your regular salary sacrifice throughout the year to offset the impact of RSU vestings on your ANI.

What if my RSUs vest in a foreign currency?

The taxable amount is converted to GBP at the exchange rate on the vesting date. Your employer handles this conversion for PAYE purposes. The GBP amount is what appears on your P60.

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Related guides

tax cliff

The £100k Tax Trap: Why You Lose 60p of Every Pound Over £100,000

how to

How to Calculate Your Adjusted Net Income (Step by Step)

pension strategy

Salary Sacrifice vs SIPP: Which Is Better for £100k+ Earners?

Sources checked: GOV.UK Income Tax, Tax-Free Childcare, Child Benefit, pension tax relief and Scottish Income Tax guidance.