58% tax on RSUs Canada - sell to cover?
I just realized that the vested RSUs are being taxed at 53% + 5% CPP =58%! Company has employed sell-to-cover so they execute a sell order for the amount to match up 58% of the vested RSUs Fair market value. The base is 130k and the RSUs are roughly ~80k (converting value from USD to CAD) per year. After bonuses and stuff TC becomes roughly ~230k. Even with this TC I don’t think the tax rate is as high as 58%. Will I get the extra amount sold as part of withelding taxes back after filing the taxes as tax refund? This is my first year where I receive RSUs so not really sure how everything works with respect to RSUs and taxes. Would appreciate any insights on this matter - especially from my Canadian folks! P.S. RSUs are in USD if that matters. Also, I’ve heard from friends of friends at Meta, Shopify (companies that give RSU in USD) etc that the RSU component gets taxed at the highest possible bracket. Not sure if appropriate refund is given after filing taxes or not. Really hoping that it does! TC 230k CAD #stocks #rsu #tax #taxes #money #canada
Yeah you need an accountant. 58% is too high. Doesn’t make sense.
Are you remotely working for a US position from Canada?
No I’m on a Canadian payroll
I guess they charge you the max tax bracket now and then return extras via tax return. It works the same with bonuses in Canada.
Oh I see. Are you working in Canada Meta? If so, do you know if I would need to file anything extra at tax filing time or would all this be taken care of automatically under the T4 form?
No, I'm now in the US, but I worked in Canada for many years. I had the same process in my previous company (they sold stocks to cover taxes) and I never reported anything extra, everything was included into T4. I remember I had a fat tax refund last time, probably because of stocks and bonuses :)
Same here for AMD… not sure if we get anything from tax return. The same is true for bonus
Is this your first year with AMD or have you been there for more than 1 tax year?
6 months at AMD
You get back the difference between max and actual rate.
That’s comforting to know. Thanks!
No problem. Ps did you submit a W-8Ben?
Most companies withhold taxes at the highest bracket. You will get the extra tax back when you file your taxes next year.
Not really sure although I hope that’s the case. Will know for certain after filing taxes in a few months! Hopefully someone here can confirm