Model a Canadian RSU grant from vest to net cash. Marginal income tax at vesting, capital-gains tax on growth if you hold, and the side-by-side comparison: sell at vest vs hold and sell later.
Key takeaway
RSUs are taxed as employment income at vesting, not when you sell. Holding doesn't defer that bill. You've already paid it. Holding only exposes you to additional capital-gains tax on growth above the vest price. For most Canadians in tech, the disciplined default is sell at vest, diversify, and route the proceeds through RRSP/TFSA.
An RSU is a promise of shares on a future date. When those shares vest (when they become really yours), their fair market value that day gets added to your employment income for the year and taxed at your full marginal rate. For a tech employee already earning $150k salary, an extra $100k of vesting income probably lands you in the 53% combined bracket. Your employer handles the immediate tax with a "sell-to-cover": they sell about a third of the vesting shares and remit withholding automatically. That withholding is usually less than your actual marginal rate, so a chunk of additional tax shows up at filing time in April. Plan for it.
The income tax bill at vesting is irreversible. You owe it whether or not you sell. That's not a question. The question is what you do with the shares once that bill is paid. Sell at vest and you walk away with cash and zero residual exposure. Hold and the stock grows, the growth gets taxed as a capital gain when you eventually sell (half taxable, at your marginal rate that year). Hold and the stock falls and you're left having paid full income tax on a value you never collected. Almost every Canadian RSU horror story I hear is some version of "I held, the stock dropped 40%, and the tax was already due."
The calculator runs your grant through an even vesting schedule with your assumed annual stock growth, computes the gross value at full vest, applies your marginal income tax (using your other income to find the right bracket), and shows two scenarios side by side: sell at vest, or hold and then sell later. Compare the two numbers. The "hold" path can absolutely win if the stock keeps growing, but you're betting more of your net worth on a single company that already pays your salary. For most people, taking the cash at vest and routing it through an RRSP or TFSA is the better risk-adjusted call.
Tax modelled at your marginal rate including the RSU vest as additional income. Sell-to-cover withholding may be insufficient. Set aside the difference. Cross-border situations (US citizens in Canada, or Canadians at US-headquartered employers) have additional layers not modelled here.
Total dollar value of the grant at the moment it was granted.
Most tech grants vest equally over 4 years (sometimes with a 1-yr cliff).
Year-over-year growth in the share price between grant and each vest event.
Hold scenario: how long you keep the shares after the last vest before selling.
Sets the combined fed + prov marginal + capital-gains rate.
Salary + bonus excluding RSU value. Used for marginal rate at vest.
Illustrative only. Not financial, tax, or investment advice. Returns are assumed, not guaranteed; tax rules and rates current as of 2026.
Multiple vest dates, partial sales, RRSP-pairing strategy, cross-border, AMT exposure. There's a lot the simple calculator doesn't cover. Sam works with Canadian tech employees on equity comp every week. He'll reach out with a 30-minute look.
Sam will see your inputs + projection before reaching out. Want to pick a time directly?
Pick a time to chatAt vesting. The fair market value of the shares that vest is added to your employment income for that year and taxed at your full marginal rate: typically 43%–54% combined federal + provincial for tech employees. There is no tax at the grant date.
For most people, sell at vest. You've already paid full income tax on the value, so holding doesn't change that. It only exposes you to additional capital gains tax on growth (and additional risk: your salary and your savings now both depend on the same company). Hold only if you have a deliberate reason and the concentration risk is acceptable in your overall plan.
When RSUs vest, most employers automatically sell enough shares to cover withholding tax, typically based on a flat 30–40% federal supplemental rate. That's almost always less than your actual combined marginal rate, which means you may owe additional tax at filing time. The shortfall surprises many tech employees in March/April.
The mechanics are similar (vest = ordinary income, hold and sell = capital gains on growth), but the marginal rates differ (Canadian combined rates are typically 5–10 points higher in the top brackets) and the half-inclusion on capital gains is Canadian-specific. Cross-border filers (US citizen working in Canada, or vice versa) have additional treaty complications.
Yes, and this is often the highest-value move. Sell at vest, take the cash, contribute to your RRSP for the deduction (offsetting some of the income tax on the vesting), and/or to your TFSA for tax-free growth. For a 35-year-old in a 50% bracket, a $20,000 RRSP contribution against $20,000 of RSU vesting roughly neutralizes the tax. That's the whole strategy.