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Tax on RSUs is on the employees' side because all the liability is theirs. So usually either the scheme allows them (not the company) to sell a number of share
by mytailorisrich 4y ago
Tax on RSUs is on the employees' side because all the liability is theirs.
So usually either the scheme allows them (not the company) to sell a number of shares to cover their tax liability, or they need to shell out the cash, which the scheme may allow to be taken from their salary. Neither should impact the company.
But as you write, it's tricky to sell shares if the company is not publicly traded. So perhaps the company has agreed to buy back shares in order to enable employees to easily sell them to cover their own tax liability, which may be what you are suggesting by 'private sale'.
- philjohn 4y agoNot everywhere. In the UK there's also employers NIC to pay, and depending on the details of the stock plan it's either payed by the employer (more common from companies I've worked at) OR by the employee.
- mytailorisrich 4y agoThat's nitpicking. That's specific and a relative small amount, which schemes indeed often make the employees liable for. If the company has to borrow to fund these things either the liability is relative large (e.g. because they do as I suggested), or... frankly I'd worry that they can survive at all because they are effectively borrowing just to be able to make payroll.