How do Amazon RSUs Work? (Restricted Stock Units)

Amazon Restricted Stock Units (RSUs) are shares of AMZN stock that are paid out over time. RSUs make up a component of an Amazon employee’s total compensation package.
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More information for Amazon employees on their benefits including the Amazon 401k plan, Mega Backdoor Roth, Sustainable Investing, and RSUs.
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Amazon vesting schedule for a new employee:
Year 1 - 5%
Year 2 - 15%
Year 3 - 40% (every 6 months you earn 20% for a total vest of 40%)
Year 4 - 40% (every 6 months you earn 20% for a total vest of 40%)
00:00 Intro - What Are Amazon RSUs
00:33 Amazon RSU Vesting Schedule
01:04 Amazon RSU Example
02:21 How are Amazon RSUs Taxed
04:22 Sell Your Amazon RSUs / Diversification
When AMZN RSUs vest, the proceeds you receive are treated as taxable income. For example, if Amazon shares are trading at $150/share and you have 200 shares vest, your proceeds will equal $30,000. All of this is taxable income.
Amazon will automatically withhold 22% to taxes to help eliminate an unpleasant surprise come the following April. The remaining 78% of shares are deposited into a brokerage account (typically custodied with Fidelity). Once the money is in your account, you can do what you want with the proceeds.
A few considerations for high-income employees who earn a large portion of their compensation through RSUs:
Taxable income: As Amazon stock does well and your vesting percentage of RSUs increases, it may be necessary to withhold more than 22% in taxes. Fortunately, Amazon allows you to adjust the tax withholding figure.
Diversification: We typically recommend selling your RSUs as soon as they vest. This will eliminate the chance of you building up concentrated shares of Amazon stock in your portfolio and can help protect your portfolio from market volatility and concentrated company risk.
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#amazon #amazonemployeebenefits #rsu #amznstock #AMZN #amazoncomp #amazoncompensation
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We focus on providing comprehensive financial planning and investment advisory strategies for tech professionals and their families.
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Third Party: Avier Wealth Advisors is not affiliated with Amazon. There is no guarantee that the information we have provided is accurate. Amazon employees are encouraged to contact their employer should they have any questions regarding their employee benefits.
Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations.