Should I sell or hold my RSUs?

At a public company the textbook answer is usually 'sell at vest and diversify'. At a private company, RSUs often can't be sold at all yet. Here's how to think about both.

First: can you even sell?

Most private-company RSUs are double-trigger — you only receive shares at a liquidity event, so there's nothing to sell beforehand. Public-company RSUs settle into sellable shares at vest. Confirm which you hold before anything else.

The public-company logic

When RSUs vest at a public company they're taxed as ordinary income on the full value — whether you sell or not. So holding is an active decision to buy that much company stock with after-tax money. The common advice: unless you'd choose to buy the stock fresh, sell at vest and diversify. Any gain after vest is a separate capital gain.

Key insight: because you're taxed at vest regardless, there's no tax penalty to selling immediately — and selling avoids piling even more of your wealth into one stock.

When holding can make sense

You have strong conviction and your overall wealth isn't concentrated in the stock.
You're managing the timing of a large block to spread capital-gains across years.
For private RSUs, you simply have no choice until the liquidity event.

How to decide

Check the tax already paid. Vesting usually triggers withholding that may not cover your full bill. Use the RSU tax calculator.
Assess concentration. How much of your net worth is this one stock? Check it.
Decide deliberately. Holding is choosing to buy; make it a choice, not inertia.

Frequently asked questions

Should I sell my RSUs as soon as they vest?

At a public company, often yes: you're taxed on the full value at vest regardless, so holding is effectively choosing to buy that much company stock with after-tax money. Unless you'd actively buy it, selling and diversifying reduces concentration risk with no extra tax cost.

Can I sell private-company RSUs before an IPO?

Usually not. Most private RSUs are double-trigger and only convert into shares at a liquidity event like an IPO or acquisition, so there are no shares to sell beforehand. Check whether yours are single- or double-trigger.

Do I pay tax twice on RSUs?

No, but in two parts. You pay ordinary income tax on the value when the RSUs settle into shares, then capital-gains tax only on any additional gain between then and when you sell.

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