Doordash, Airbnb, Roblox, Wish, Affirm, and other unicorn companies will go public this year. Employees were granted RSUs or stock options. How much will they make? Stock price after the employee lockup period expires matters a lot.

Example for RSU:

Assume you have 20,000 shares of stocks vested on Uber IPO day. At $45 per share, they are worth $900,000. Uber withholds roughly 40% (22% Federal tax, 10% CA state tax and 8.2% SS/Medicare/etc), so you would be awarded 12000 shares.

Assume your actual federal rate is close to 37%, you would owe IRS $900,000 * (37%-22%) = $135,000. If the stock price goes down to $20 and you have to sell $135,000 / $20 = $6,750 shares to cover federal tax alone.

Now you have $12,000 - 6,750 = $5,250 shares left, with a total value of $105,000 . If you live in California, you must sell more shares to cover the state tax.

Q: Does the holding period for RSU grants for long-term capital gains tax rates start at the issuance of the RSU or at the time the RSU vests?
A: It starts on vesting date. See details on Quora.

Salarytics

Doordash, Airbnb, Roblox, Wish, Affirm, and other unicorn companies will go public this year. Employees were granted RSUs or stock options. How much will they make? Stock price after the employee lockup period expires matters a lot.

Example for RSU:

Now input your RSU numbers or stock options and calculate the net value and tax due.