How Your Apple RSUs Work: Vesting, Taxes, and Tips
If you're an Apple employee, RSUs make up a significant portion of your total compensation. These equity awards can represent hundreds of thousands of dollars over your career, but they come with important tax implications and strategic decisions you'll need to make.
This guide walks you through how Apple RSUs work, when and how they're taxed, and strategies to maximize their value as part of your overall financial plan.
What Are Apple RSUs?
Restricted Stock Units (RSUs) are a form of equity compensation granted to employees. These RSUs vest over time, converting to Apple stock as they do. Unlike stock options, RSUs have no exercise price. When they vest, you receive actual shares of Apple stock.
Apple awards RSUs in three main ways:
On-Hire Stock Awards: These are part of your initial hiring package and are negotiated when you accept your offer. The vesting schedule is determined at hire.
Stock Refreshers: Apple awards these annually based on performance, typically rated on a scale. Refresher eligibility and timing vary by organization, level, and individual circumstances, and typically begin in the second calendar year of employment, though this can vary.
Out-of-Cycle Bonuses: These are less predictable and are typically granted to high-performing employees or those Apple considers retention risks due to competitor interest.
Apple RSU Vesting Schedule
Most Apple RSU grants vest every six months over a four-year schedule. Each vesting event represents 12.5% of your total grant. For example, if you're granted 1,000 RSUs, you'll receive 125 shares every six months over four years. This creates eight separate vesting events.
Your grant date is typically when you start employment (or shortly after for on-hire grants), and your first vesting occurs six months later. If you join on June 15th, your grant might be set for June 15th, with your first vesting date six months later on December 15th.
Your grant specifies a fixed number of RSUs rather than a fixed dollar amount. The value of those units will fluctuate with Apple's stock price over time.
RSU Taxation
RSU taxation happens in two stages: at vesting and when you sell the shares.
Taxation at Vesting
When your RSUs vest, they're treated as ordinary income, just like your salary or a cash bonus. The fair market value of the vested shares on the vesting date becomes taxable income, reported on your W-2.
Apple withholds and sells a portion of your RSUs at the vesting date to cover taxes. The rate for withholding is 22% on RSU income up to $1 million per year, and 37% on any amount exceeding $1 million. However, your actual tax rate may be much higher than the standard 22% withholding.
For example, if 500 RSUs vest when Apple stock is trading at $200 per share, you'll recognize $100,000 in taxable income. Apple withholds $22,000 (22%), but if you're in the 35% tax bracket, you actually owe $35,000 in federal taxes, leaving you with a $13,000 shortfall come tax time.
To avoid surprise tax bills, consider setting aside additional cash from each vesting to cover the tax gap.
Taxation When You Sell
Once your RSUs vest, you own the shares outright. Any gains or losses from that point forward are treated as capital gains. The cost basis for this is the fair market value of the shares on the vesting date, the same amount that was taxed as ordinary income.
Depending on how long you hold your vested RSUs before selling them, the gain may be taxed as a short-term or long-term gain.
Short-Term Capital Gains: If you sell within one year of the vesting date, any appreciation is taxed at ordinary income rates (10%–37%).
Long-Term Capital Gains: If you hold shares for more than one year after vesting, gains qualify for long-term capital gains rates (0%–20%).
High earners may also face the Net Investment Income Tax (NIIT), an additional 3.8% on investment income if modified adjusted gross income exceeds certain thresholds.
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Should You Hold or Sell Your Vested RSUs?
This is one of the most important decisions you'll make with your Apple equity. Fortunately, there is a framework to guide your thinking.
The "Cash Bonus Test"
Think of your vested RSUs as a cash bonus paid in Apple stock. Ask yourself: If Apple gave you $100,000 in cash today, would the first thing you do be to buy $100,000 worth of Apple stock? If your answer is no, you should consider selling your RSUs when they vest.
This approach helps you:
Lock in the value of your compensation
Avoid concentration risk (having too much of your wealth tied to a single company)
Diversify your investments across different assets and sectors
Free up cash for other financial goals
The Reality of Holding
Many employees mistakenly believe there's a tax benefit to holding vested RSUs. Here's the truth: There's no tax advantage to holding vested RSUs versus selling them immediately and buying Apple stock with the proceeds.
If you hold vested shares for over a year before selling, you'll pay long-term capital gains tax (typically 15%–20%) on appreciation above the vesting date value. But if you took the same cash and bought Apple stock, holding it for over a year, you'd get the exact same long-term capital gains treatment on the appreciation.
The real consideration is whether you want that level of exposure to a single stock.
Concentration Risk
A common rule of thumb: If more than 20% of your investable assets are in Apple stock, you're likely over-concentrated. This creates unnecessary risk because your income, benefits, and investment portfolio are all tied to one company's performance. To avoid this, consider automatically selling stocks at each vesting once they exceed 20% of your portfolio.
What Happens to Your RSUs When You Leave Apple
The treatment of your RSUs depends on whether they've vested and the circumstances of your departure.
Vested RSUs
Once your RSUs vest and the shares are delivered to your brokerage account, they're yours to keep. You retain full ownership of these shares no matter how or why you leave Apple. You can hold these shares indefinitely or sell them according to your financial plan.
Unvested RSUs
Unvested RSUs are typically forfeited immediately upon termination of employment. This is standard across the industry and applies whether or not you:
Resign to take another job
Are laid off or subject to a reduction in force
Are terminated for performance or cause
Leave for any other reason
For example, if you have 1,000 RSUs with 500 vested and 500 unvested, you keep the 500 vested shares but forfeit the 500 unvested units. This can represent significant value, especially if you have multiple overlapping grants or recent refresher awards.
Timing Matters
The precise timing time your departure can make a substantial difference in how much equity you keep.
RSUs vest on specific dates, not gradually over time. If you leave the day before a vesting date, you forfeit those shares. If you leave the day after, you keep them.
Your employment end date (not your resignation date) determines what you forfeit. If you give two weeks' notice and a vesting occurs during that period, you typically keep those shares.
If you're considering leaving Apple, it may make sense to time your departure after a significant vesting event, especially if you have large grants pending. However, you’ll want to make career decisions based on your overall goals and opportunities, not just the equity you'd forfeit. Sometimes the right career move means walking away from unvested shares.
Special Circumstances and Exceptions
While most unvested RSUs are forfeited upon departure, some situations may involve different treatment.
Acquisition or Change of Control: If Apple were acquired or underwent a change of control, your grant agreement might include accelerated vesting provisions. These vary by grant and should be reviewed in your specific agreement.
Retirement Provisions: Some employees may have provisions for continued vesting into retirement, though this is not standard and depends on role, tenure, and specific grant terms.
Severance Packages: In some layoff situations, Apple may offer severance that includes continued vesting or cash equivalent of unvested RSUs. This is negotiable and situation-dependent.
Death or Disability: Your grant agreement may include provisions for accelerated or continued vesting in these circumstances.
Your RSU grant agreement is the definitive source for understanding what happens to your equity. Before making any employment decisions, review:
The exact vesting schedule for each of your grants
Any provisions for accelerated vesting
What constitutes "termination of employment" under the agreement
Treatment of unvested shares in various scenarios
Any post-employment restrictions or requirements
These agreements can be found in your brokerage account or through Apple's equity administration system.
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Smart Strategies for Your Apple RSUs
Build RSUs Into Your Financial Plan
Rather than thinking of RSUs as separate from your finances, you can integrate them into your overall strategy. For example, you can use your RSU profits to:
Max out your 401(k) contributions, including after-tax contributions for the mega backdoor Roth if you're eligible
Fund major goals like buying a home, funding college through 529 plans, or paying down high-interest debt
Create a diversified portfolio by reinvesting profits in a diversified mix of stocks, bonds, ETFs, and other assets that align with your risk tolerance and timeline
Establish an emergency fund by saving up for at least three to six months of expenses
Plan for Multiple Vesting Events
Once you've been at Apple for a few years with refresher grants, you may have RSUs vesting from multiple grants throughout the year. This creates a steady stream of equity compensation but also requires careful tax planning. With overlapping grants, you might face:
Higher effective tax rates as RSU income stacks on top of your base salary
The need to adjust withholding or make estimated payments
More frequent decisions about selling versus holding
The sooner you draft a concrete strategy for how you want to manage your RSUs, the better.
Calculate Your True Tax Liability
Don't assume Apple's withholding covers your full tax bill. The 22% federal withholding rate often falls short if you're in the 32%, 35%, or 37% tax bracket. Run the numbers based on your total income to determine if you need to:
Increase W-4 withholding on your regular salary
Make quarterly estimated tax payments
Set aside additional cash from each vesting event
If you live in a high-tax state like California, factor in state taxes as well. Your combined tax rate can easily exceed 45%.
Create a Selling Strategy and Stick to It
Rather than letting vested shares accumulate without a plan, establish clear criteria for when and how much to sell. This helps you avoid over-concentration in Apple stock and removes emotional decision-making from the equation. Consider approaches like:
Selling a fixed percentage at each vesting (25%, 50%, or 100%)
Setting target allocation limits (e.g., "no more than 20% of my portfolio in Apple stock")
Using proceeds systematically to fund specific financial goals
Avoid Market Timing
Trying to time the market with your RSU sales is rarely a winning strategy. Apple's stock will fluctuate, and you'll never perfectly predict highs and lows. Instead, focus on your overall financial plan and goals, maintaining appropriate diversification, consistent execution of your selling strategy, and tax-efficient planning across all income sources. The best approach is typically a systematic strategy that removes emotion from the decision-making process.
Work With a Fiduciary Financial Advisor
Managing Apple RSUs involves complex decisions around taxation, diversification, and coordination with your other benefits. A fiduciary financial advisor can help you:
Calculate your true tax liability and avoid surprises
Develop a strategic approach to selling versus holding vested shares
Coordinate RSUs with your Apple 401(k), ESPP, and other benefits
Create a diversified investment strategy that reduces concentration risk
Plan for major financial goals and prepare for retirement
Fee-only fiduciary advisors are legally required to act in your best interest and don't earn commissions from selling you products. This cuts out the usual conflicts of interest and ensures the advice you receive is tailored to your needs and goals.
Making the Most of Your Apple RSUs
Navigating Apple's RSU program can get complicated fast. It’s easy to make a mistake that could cost you thousands. It pays to have the right help in your corner.
At TrueWealth Financial Partners, we specialize in helping you maximize your benefits so you can retire with more. As a team of fee-only fiduciary advisors in Bellevue, WA, we work exclusively in your best interest. No commissions, no conflicts of interest, just straightforward advice tailored to your situation.
Ready to make the most of your Apple compensation? Schedule a free consultation with one of our advisors today, and we can get started on a retirement plan that works for you.
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FAQs
Do Apple RSUs have dividend equivalent rights?
Yes, Apple credits dividend equivalent rights on unvested RSUs whenever the company pays a cash dividend to shareholders. The dollar amount equals the per-share dividend multiplied by the number of unvested RSUs you hold. These dividend equivalents are subject to the same vesting schedule as your RSUs and are paid in cash when the related RSUs vest. If you forfeit unvested RSUs, you also forfeit the associated dividend equivalents.
Can I defer receiving my vested Apple RSUs?
For most Apple employees, no. Standard RSU grants settle immediately upon vesting, and you receive the shares (minus tax withholding) within a few days of the vesting date.
Do Apple RSUs trigger the Alternative Minimum Tax (AMT)?
No. Unlike Incentive Stock Options (ISOs), RSUs do not directly trigger the AMT. RSUs are taxed as ordinary income when they vest, which is already included in your regular taxable income. However, the additional income from RSU vesting could indirectly push you into AMT territory if you're a high earner with other tax preference items. This is more likely if you also exercise ISOs in the same year or have other AMT-triggering events.
Can I gift or transfer my Apple RSUs to family members?
No. RSUs cannot be sold, assigned, transferred, pledged, or otherwise disposed of until they vest and settle into actual shares. Once the RSUs vest and you receive the shares in your brokerage account, you own them outright and can gift or transfer them like any other stock. However, be aware that gifting appreciated shares may have gift tax implications.
What's the difference between Apple RSUs and stock options?
RSUs and stock options are fundamentally different.
With stock options, you have the right to purchase shares at a set price (the strike price), but you must pay to exercise them.
RSUs require no purchase. When they vest, you automatically receive shares.
Apple primarily uses RSUs for employee compensation.
Should I participate in both Apple's RSU program and ESPP?
Yes, if your cash flow allows. The RSU program is part of your compensation package at no cost to you. The ESPP is a separate benefit that allows you to purchase Apple stock at a 15% discount through payroll deductions, with a lookback provision that can increase your gain beyond 15%. Maximizing ESPP participation (up to IRS limits) can be valuable, but you should have a plan to sell ESPP shares quickly to capture the discount and avoid over-concentration in Apple stock.