My RSUs Were Already Taxed. Do I Pay Again?

No, you are not taxed twice on the same money. But you are taxed twice at two different moments, on two different things, and only the first one is handled for you. The second is yours — and almost nobody is told about it at the point they need to know.

If you work in tech or pharma in Ireland and part of your pay arrives as shares, this is the sequence nobody walks you through.

What already happened, on the day they vested

When restricted stock units vest, Revenue treats the shares as pay. In their words, you must pay Income Tax, USC and PRSI on the market value of those shares at the date of vesting — and your employer “will make the necessary deductions through payroll and pay the tax directly to the Collector-General”.

So that part is done. It went through payroll, it is on your payslip, and you did not have to do anything. If your shares vested and some were sold immediately to cover the bill, that is the “sell to cover” you have seen in your plan account — your employer settling the income tax on the vest.

One thing worth knowing: this is based on where you were tax resident when the shares vested, not where you were while you earned them. Vest while Irish resident and the whole amount is taxable here, even if part of the vesting period was spent abroad.

The number that matters afterwards: your base cost

Here is the part that stops the double-tax worry. The market value that was taxed as pay at vest becomes your acquisition cost for capital gains purposes. You are not taxed again on it.

What that means in practice: if 100 shares vested at €90 and you sell them later at €110, the gain Revenue cares about is €20 a share — not €110. The first €90 was already taxed as income and is not touched again.

It also means something less comfortable. Sell on the day they vest and your gain is roughly nil, because the sale price and the vest price are nearly the same. Hold for three years while the share price doubles, and the whole of that rise is a capital gain you owe tax on, at 33%, on top of the income tax you already paid.

A sale is a sale, even a sell-to-cover

This is the sentence that catches people, and it is Revenue's own: “You must report this disposal to Revenue, even if no tax is due. Your employer will not deduct any tax or report the disposal for you.”

Read that twice if you have ever assumed the plan administrator handles it. They do not. The shares sold at vest to pay your income tax are a disposal by you. The gain is usually tiny or nil, so the tax is usually nothing — and the reporting obligation still exists.

The currency trap

Your shares are almost certainly priced in dollars. Irish capital gains are computed in euro, at both ends: the vest converted at that day's rate, the sale converted at that day's rate.

The consequence surprises people. The share price can be flat in dollars and you can still have a taxable gain in euro, purely because the exchange rate moved. It can also run the other way and hand you a loss you did not know you had — which is worth capturing, because losses carry forward.

Which shares did you actually sell?

After a few years of quarterly vesting you own the same share bought at a dozen different prices. You do not get to choose which ones you sold. Ireland requires first in, first out — the oldest shares go first, and they are usually the ones with the lowest base cost and the biggest gain.

This is the single biggest reason RSU maths done in your head comes out wrong, and it is why “I sold the ones I bought last year” is not a thing you can decide after the fact.

What you will actually owe, and when

Capital gains tax is 33% on gains above the annual exemption of €1,270. That exemption is per person, it does not transfer between spouses, and it does not carry forward — use it or lose it each year.

The deadlines are the part that trips up people who are used to PAYE doing everything: you pay before you file. Sell between January and the end of November and the tax is due by 15 December of that same year. Sell in December and it is due by 31 January. The paperwork follows the October after. Nobody sends you a bill.

So is it a Form 11?

Not necessarily — and this is where the fear usually comes from. Share income taxed through payroll is PAYE income, so it does not by itself push you into self-assessment. You are a chargeable person, and into Form 11 territory, if your non-PAYE income passes the usual thresholds: more than €5,000 net, or more than €30,000 gross.

A capital gain on its own does not make you a chargeable person, but it does have to be reported. For a PAYE worker whose only complication is selling shares, that is usually the short capital gains return rather than the full Form 11. If something else has already put you into self-assessment, the gain goes on the Form 11 you were filing anyway. We wrote the whole map of who files what in our guide to whether you need to file at all.

What about ESPP?

Same shape, different starting point. With an employee share purchase plan you buy at a discount, and the discount is the pay: you owe Income Tax, USC and PRSI on it, and again your employer deducts it through payroll.

Your base cost for capital gains is then the market value of the shares on the date you acquired them — not the discounted price you paid. So the discount is not taxed twice either. Worth checking your plan documents, though: where an ESPP is structured as a share option plan, the base cost is the market value on the exercise date instead, which can be a different number.

The short version

Vesting is pay and your employer handled it. Selling is a capital gain and you handle it. Your base cost is the value that was already taxed, so nothing is taxed twice. Sales must be reported even when no tax is due, the tax is paid before the return is filed, and the oldest shares are always the ones you sold.

If you have several years of vests, a mix of currencies and no record of what each tranche was worth on its vest date, that is not disorganisation — it is genuinely fiddly, and it is exactly the arithmetic worth writing down once rather than reconstructing every December.

This article is general information, not personal tax advice. Everyone's circumstances differ, share plans vary in how they are structured, and rules change in the Budget each October — if yours is substantial, talk to a qualified tax adviser.