Shocked, angry, frustrated?
These are normally the emotions we feel when something unexpected happens.
When its an unexpected financial event, it can be even worse.
Money is one of those things, it can either be something we feel comfortable talking about, or something that makes us entirely uncomfortable.
When it comes to unexpected events, there is no more frustrating experience than learning you have a massive tax bill and having no idea why.
As an executive in a large technology firm, you are aware of the employee shares you get.
I won’t talk about the employee shares you can buy with your salary at a discount today.
I am talking about those shares you go that vested in few years into your role and which you then received over the next two to four years.
If you keep smashing your targets, you will keep getting them.
But how do you manage the tax that comes from these?
If you want a comprehensive guide, check out our Definitive Guide to RSU’s here https://www.chrisnairn.com.au/free-reports/ you can download for free.
To help, there are 3 ways you can manage your employee shares and the tax issues that come from these.
1. Estimate
2. Aside
3. Parcel
Estimate the tax position each year. Know how many shares vested that financial year and you can estimate the amount of tax you may be up for.
Once you know the tax, you can put a plan in place to put funds aside to pay for the tax. In most cases, people don’t have enough spare cash lying around, so it makes sense to consider selling your employee shares.
And finally, understand the cost base and your capital gain consideration for each parcel before selling. You don’t want to be in a position where you make a decision that is going to cost you more $ in tax than you need to by selling.
There you have it. 3 steps to manage your employee shares.
If you want more information, check out the free reports here https://www.chrisnairn.com.au/free-reports/ and look out for our events and how you can register your interest.
