How much tax do you pay on RSUs in the UK?

RSUs are taxed as income at vest, at your marginal rate (20%, 40%, 45%, or about 60% in the £100k–£125,140 band) plus employee National Insurance. A later sale adds Capital Gains Tax on the growth.

Is RSU income reported on self-assessment?

The income is usually taxed through PAYE at vest, but if your employer under-withheld, the balance is settled through self-assessment. Capital gains on a later sale are also reported there.

Are RSUs taxed differently for higher earners?

Yes. Above £100,000 the personal allowance tapers away, pushing the effective rate on a vest to around 60% in that band, which standard sell-to-cover does not capture.

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RSU & equity

The RSU Tax Playbook for 2026/27

10 min read. Last verified 23 June 2026. 2026/27 rules.

The short answer

RSUs are taxed as employment income at their value on the vest date, through PAYE. Employers usually sell shares to cover a flat ~47%, which under-withholds for higher earners, leaving a self-assessment true-up. A later sale of the shares is a separate Capital Gains Tax event on the growth above the vest-date value.

Key facts

RSU vests are taxed as income at your marginal rate plus employee NI.
The effective rate is around 60% between £100,000 and £125,140 (personal allowance taper).
Sell-to-cover is typically a flat 47% (45% tax + 2% NI), often too low for high earners.
A later sale is taxed under CGT: £3,000 allowance, then 18%/24% on the gain.
Scottish taxpayers pay Scottish income tax on vests (up to 48%), UK NI and UK CGT.

This playbook ties together everything that affects the tax on UK RSUs in 2026/27. Each section links to a focused explainer, and every figure is checked against gov.uk and gov.scot.

How are RSUs taxed when they vest?

At vest, the market value of the shares is employment income, taxed through PAYE at your marginal rate plus employee National Insurance. Holding the shares does not defer this; it only affects future capital gains.

Why does sell-to-cover leave me owing tax?

Employers usually sell a flat slice, often 47%, to cover the tax. If your real marginal rate is higher, for example in the 60% personal-allowance-taper zone, that slice is not enough and you owe the difference at self-assessment. This gap is the true-up.

What happens when I sell the shares later?

Selling is a separate Capital Gains Tax event. Only the growth above the vest-date value is taxed, after the £3,000 annual exempt amount, at 18% or 24%. HMRC matches your shares using same-day, 30-day and Section 104 pooling rules.

Does living in Scotland change it?

Yes for income tax: Scottish bands apply to vests, up to 48%. No for National Insurance and Capital Gains Tax, which stay UK-wide.

Common questions

How much tax do you pay on RSUs in the UK?: RSUs are taxed as income at vest, at your marginal rate (20%, 40%, 45%, or about 60% in the £100k–£125,140 band) plus employee National Insurance. A later sale adds Capital Gains Tax on the growth.
Is RSU income reported on self-assessment?: The income is usually taxed through PAYE at vest, but if your employer under-withheld, the balance is settled through self-assessment. Capital gains on a later sale are also reported there.
Are RSUs taxed differently for higher earners?: Yes. Above £100,000 the personal allowance tapers away, pushing the effective rate on a vest to around 60% in that band, which standard sell-to-cover does not capture.

Related playbooks

Sources

Figures verified against gov.uk and gov.scot on 30 June 2026. Constants version 2026/27.3. 2026/27 tax year. This is a modelling tool for general insight, not financial or tax advice.