A Restricted Stock Unit (RSU) is a type of equity compensation through which an employer grants an employee the right to receive a specified number of company shares at a future date, subject to one or more vesting conditions. The most common condition is continued employment over a defined vesting period, typically three to four years. RSUs carry no upfront purchase cost to the employee; value accrues as the underlying share price rises during the vesting period.
Upon vesting, the employee receives shares (or a cash equivalent in some schemes) and the fair market value at the vesting date is recognised as taxable income. This distinguishes RSUs from stock options, which only generate income when exercised and only if the market price exceeds the exercise price. Because RSUs retain value even if the share price declines modestly post-grant, they are considered lower risk than options and are the dominant equity instrument at major listed companies.
In the Netherlands, the taxable moment for RSUs is the vesting date. The fair market value of vested shares is treated as wages subject to loonbelasting (wage tax) and social contributions. Employers are required to withhold and remit these amounts through the payroll administration. Employees who receive RSUs from non-Dutch parent companies may face additional cross-border reporting obligations under the applicable bilateral tax treaty, and employers must reflect the vesting event correctly in the loonaangifte (payroll return).