RSUs & Share Options Tax in Ireland: How the Tax Works

Employee shares create one of the easiest Irish tax mistakes to make.

The mistake is thinking there is only one tax event.

For many Restricted Stock Units (RSUs) and employee share options there are actually two stages:

1. an employment-tax event when the award becomes yours; and
2. a possible Capital Gains Tax event when you later sell the shares.

Those stages use different rules, different tax bases and different filing responsibilities.

This guide reflects Revenue rules checked on 4 October 2026 and separates the payroll event from the later investor tax obligations.

It focuses on the common position for an Irish employee receiving ordinary RSUs or unapproved share options. Approved schemes, KEEP, internationally mobile employees, directors, non-domiciled individuals and unusual plan structures can require different treatment.

RSUs and share options in one table

The separation between employment income and capital gain is the central idea.

What is an RSU?

A Restricted Stock Unit is a promise by an employer that you will receive shares — or sometimes cash linked to the value of shares — after specified vesting conditions are met.

A vesting condition might involve:

• remaining employed for a period;
• hitting an individual target;
• the company reaching a target;
• or a combination of conditions.

You do not usually own the underlying shares simply because an RSU has been granted.

The important date for ordinary share-settled RSUs is usually the vesting date.

How are RSUs taxed in Ireland?

Revenue states that share-settled RSUs are subject to:

• Income Tax;
• Universal Social Charge;
• and employee PRSI

on the market value of the shares at vesting, or when the shares pass to you if that occurs earlier.

Your employer processes the taxable value through payroll.

That means an RSU can create a large taxable employment benefit even though no cash bonus has arrived in your bank account.

Employers commonly deal with this operationally by withholding or selling some of the shares, or by collecting cash through payroll, depending on how the plan is designed.

Example: €20,000 of RSUs vest

Assume 200 RSUs vest when the shares are worth €100 each.

The €20,000 is added to taxable employment remuneration and payroll applies the Income Tax, USC and PRSI rates relevant to you.

The exact cash tax withheld depends on your payroll position, tax credits, bands, USC and PRSI treatment.

What happens when you later sell RSU shares?

The later sale is a separate event.

Revenue states that a disposal of RSU shares may give rise to CGT and that you must report the disposal yourself.

For most ordinary share gains, the standard CGT rate is 33%.

Individuals also have an annual €1,270 personal CGT exemption.

The key point is that you are not normally taxed again under CGT on the entire value already treated as employment income.

For a straightforward employee-share award, the amount already brought into the employment-tax computation forms part of the acquisition-cost analysis for the later CGT calculation.

Example: €20,000 vest, then €24,000 sale

Continue the earlier example.

The shares were worth €20,000 when they vested.

You later sell the same shares for €24,000.

Ignoring dealing costs, other gains and losses:

Potential capital gain: €24,000 − €20,000 = €4,000.

If your full €1,270 annual exemption is still available:

Taxable gain: €4,000 − €1,270 = €2,730.

At 33%:

Illustrative CGT: €900.90.

The payroll tax at vesting and the CGT on the later €4,000 increase are different taxes on different parts of the economic return.

What if the RSU shares fall after vesting?

This is where employee shares can feel especially painful.

Suppose €20,000 of shares vest and the €20,000 is treated as employment income.

You keep the shares.

They later fall to €16,000 and you sell.

You may now have a €4,000 capital loss for CGT purposes.

That capital loss does not normally undo the fact that the earlier €20,000 was employment income when the RSUs vested.

In other words:

A later fall in the share price does not retrospectively reduce the employment-tax charge at vesting.

This is an important concentration-risk issue for employees who receive a large part of their compensation in shares of the company that also pays their salary.

Are RSUs taxed when granted?

Ordinary RSUs are generally not taxed simply because the employer makes the grant or promise.

The charge generally arises when the RSUs vest and the shares become yours, or earlier if the shares pass to you before the stated vesting date.

This is different from being given unrestricted shares immediately.

The wording of the plan matters.

What about cash-settled RSUs?

Some RSU plans never deliver shares.

Instead, the employee receives cash based on the value of a specified number of shares.

Revenue treats that cash payment as employment income subject to:

• Income Tax;
• USC;
• and PRSI.

Because you never receive the underlying shares, there is no later CGT disposal of those shares by you.

What is a share option?

A share option gives you the right to acquire shares at a predetermined price.

For example, an employer might give you the right to buy 1,000 shares for €10 each at some future date.

If the shares are worth €18 when you exercise the option, the economic benefit is €8 per share.

For an ordinary unapproved option, that €8-per-share benefit is the starting point for the employment-tax calculation.

Short options versus long options

Revenue distinguishes between:

• a short option — exercisable within seven years of grant; and
• a long option — exercisable more than seven years after grant.

For a short option, there is generally no tax charge at grant.

A long option can create a tax charge at grant where the option price is below the market value of the shares at that date.

In practice, many employee plans set the option price at market value when the option is granted, which can mean no grant-date charge even for a long option.

The exercise event still needs to be considered separately.

How are unapproved share options taxed when exercised?

The basic exercise gain is:

market value of shares at exercise − exercise price − amount paid for the option, if any

That gain is subject to:

• Income Tax;
• USC;
• and PRSI.

The major administrative change is that, for gains realised on or after 1 January 2024, the employer handles the tax through PAYE payroll.

Before 2024, employees exercising unapproved options generally had to deal with Relevant Tax on Share Options — RTSO — themselves within 30 days.

That historic rule still matters if you are correcting or filing an old pre-2024 option event, but it is not the normal process for a 2026 exercise.

Example: exercising employee share options

Assume you hold 1,000 options.

Your exercise price is €10 a share.

When you exercise, the shares are worth €18.

The €8,000 gain is processed through payroll for Income Tax, USC and PRSI.

If you immediately sell for roughly the same €18,000 market value, there may be little or no separate capital gain before transaction costs and other adjustments.

But the sale is still a disposal and reporting requirements can still apply.

What if you keep the option shares and sell later?

Suppose the same shares are worth €24 each when you eventually sell them.

Sale proceeds:

1,000 × €24 = €24,000.

The CGT acquisition-cost rules for option shares depend technically on whether the shares were newly issued or already in existence when the option was exercised.

Revenue’s rules are designed so that the amount already brought into the option’s income-tax computation is reflected in the later acquisition-cost calculation.

For a straightforward example where the effective CGT base is €18,000:

Capital gain: €24,000 − €18,000 = €6,000.

That €6,000 is then considered under the normal CGT rules, including other gains, allowable losses and the annual personal exemption.

This is why the exercise-date market value is one of the most important records to keep.

Do you still have to file RTSO1 in 2026?

Not for an ordinary unapproved share-option gain realised in 2026.

Revenue states that where the gain is realised on or after 1 January 2024:

• the employer accounts for Income Tax, USC and PRSI through payroll;
• you do not need to register for RTSO merely because of that event;
• and you do not submit an RTSO1 for that post-2023 gain.

However, a later disposal of the shares creates a separate CGT reporting obligation.

Old exercises before 1 January 2024 remain under the old rules.

What happens on a cashless exercise?

A cashless exercise typically means enough shares are sold immediately to fund:

• the exercise price;
• the payroll tax;
• and sometimes transaction costs.

Do not assume that “cashless” means “taxless”.

There are still two transactions to understand:

1. the option is exercised, creating the employment gain; and
2. shares are disposed of to fund the exercise or tax.

Revenue explicitly notes that a disposal can arise in a sell-to-cover or cashless arrangement.

If the shares are sold immediately at approximately the exercise-date value, the capital gain may be small, but the disposal still needs to be tracked.

When must CGT be paid after selling employee shares?

Ireland separates the CGT payment deadline from the CGT return deadline.

For a disposal between 1 January and 30 November, CGT is generally payable by 15 December of the same year.

For a disposal between 1 December and 31 December, CGT is generally payable by 31 January of the following year.

The CGT return is generally due by 31 October of the year after the disposal.

That creates a common trap:

You can owe the CGT before the annual tax return is due.

For the full process, see our Capital Gains Tax in Ireland guide.

You may have to report a disposal even when no CGT is due

Revenue requires disposals to be reported even where no CGT is payable.

That can happen because:

• the shares were sold immediately after vesting or exercise;
• the gain was below the €1,270 exemption;
• another capital loss offsets the gain;
• or the shares were sold at a loss.

The absence of tax does not automatically mean the event can be ignored.

How does FIFO affect repeated RSU vesting?

Employees often receive shares in multiple vesting tranches.

That creates a record-keeping problem.

Revenue’s normal share identification rules can apply where shares of the same class are acquired at different times.

The standard rule is First In, First Out — FIFO.

Broadly, if you hold multiple batches of the same class of shares and sell only some, the oldest holding is normally treated as sold first.

That means a broker’s display of “average cost” is not automatically the Irish tax computation.

There are also special rules where shares are sold at a loss and substantially identical shares are acquired within four weeks.

For employees with frequent vesting, ESPP purchases and open-market purchases in the same employer stock, this can become materially more complicated.

What about foreign employers and US-listed shares?

A large share of Irish RSU and option compensation comes from multinational employers whose shares trade in US dollars.

That does not remove the Irish tax obligations.

For an Irish payroll employee, the employer may already process the employment-tax event correctly through Irish payroll.

The later disposal still needs an Irish CGT calculation.

Internationally mobile employees need extra care.

Revenue’s public RSU guidance generally looks to Irish tax residence at vesting, while its detailed manuals contain additional rules for particular foreign-employment and non-domiciled situations.

Share-option gains can also require apportionment where the relevant employment was exercised across more than one country.

If you moved country during the grant-to-vest or grant-to-exercise period, do not rely on a simple domestic example.

Why euro conversion matters

Your broker may show everything in US dollars.

Your Irish tax computation is not simply the dollar gain multiplied by today’s exchange rate.

For tax records involving foreign-currency shares, keep the euro value at the relevant dates.

For employee shares this can include:

• market value at vesting;
• market value at option exercise;
• exercise price;
• sale proceeds;
• dealing costs;
• and dividend amounts.

Foreign-currency movements can change the euro gain even when the share price itself has moved very little in dollars.

Keep the actual exchange-rate evidence used for the tax computation rather than trying to reconstruct it years later.

What about dividends after the shares vest?

Once RSUs vest into ordinary shares, you are a shareholder.

If those shares pay dividends, dividend taxation is separate again.

You can therefore have three different tax categories associated with the same employee-share package:

1. employment tax at vesting or exercise;
2. dividend taxation while you own the shares;
3. CGT when you dispose of them.

Our Investment Tax in Ireland guide covers dividends and direct-share taxation in the wider investing context.

Approved schemes and KEEP are different

This guide is deliberately focused on ordinary RSUs and unapproved share options.

Revenue-approved schemes can receive different treatment.

These include:

• Approved Profit-Sharing Schemes;
• Employee Share Ownership Trusts;
• Save As You Earn schemes.

The Key Employee Engagement Programme — KEEP also has its own rules.

Do not apply the unapproved-option rules automatically to an award just because it contains the words “share option”.

The scheme documents matter.

Records worth keeping

Employee-share tax becomes difficult when the paperwork is missing.

For every grant or award, keep:

• grant date;
• number of RSUs or options;
• vesting schedule;
• vesting dates;
• exercise dates;
• option exercise price;
• amount paid for the option, if any;
• market value at each vest or exercise;
• number of shares withheld or sold for tax;
• payroll statement showing the taxable benefit;
• broker contract notes;
• sale date and proceeds;
• transaction fees;
• exchange rates used;
• dividend statements;
• and any overseas tax withheld.

Do not rely exclusively on your employer’s equity portal remaining accessible after you leave the company.

The concentration-risk question

Tax is only part of the decision.

If your salary, career prospects and a large investment holding all depend on one employer, your financial life is concentrated in the same company.

Vested RSUs are economically similar to receiving cash compensation and deciding whether to buy your employer’s shares with it.

A useful question is:

If this amount arrived in cash today, would I use all of it to buy this company’s shares?

If the answer is no, the tax position should not be the only reason to keep the shares.

For the wider portfolio decision, see Shares, ETFs and Funds in Ireland and Investment Tax in Ireland.

Frequently asked questions

Are RSUs taxed when granted in Ireland?

Ordinary RSUs are generally taxed when they vest rather than when they are first promised. The market value at vesting is generally processed through payroll for Income Tax, USC and PRSI.

Are RSUs subject to CGT?

The vesting event is generally employment income. If you later sell the resulting shares, the later increase or decrease in value can create a separate capital gain or loss.

Who pays the tax on RSUs?

Your employer generally withholds the employment taxes through payroll. You remain responsible for the later CGT computation, payment and reporting if you dispose of the shares.

Do I pay RTSO on share options in 2026?

For an ordinary unapproved share-option gain realised in 2026, the employer handles Income Tax, USC and PRSI through payroll. The old employee RTSO payment process applies to pre-2024 gains rather than a new 2026 exercise.

Is a share option taxed when it is granted?

A short option, exercisable within seven years, is generally not taxed at grant. A long option can create a grant-date charge if the option price is below market value at grant.

What tax applies when I exercise share options?

For an ordinary unapproved option, the exercise gain is generally subject to Income Tax, USC and PRSI. For gains realised on or after 1 January 2024, the employer handles this through payroll.

If I sell the shares immediately, do I still have CGT?

There may be little or no capital gain where shares are sold immediately at approximately the same value used for the vesting or exercise tax calculation. The disposal still needs to be recorded and can still need to be reported.

Can a falling share price give me a tax refund on the RSU vest?

Not normally. A fall after vesting can create a capital loss when the shares are sold, but it does not retrospectively reverse the employment income that arose when the RSUs vested.

What if my employer is American?

Irish tax can still apply. The employment award may be processed through Irish payroll, and a later sale can create an Irish CGT obligation. Cross-border employment periods and changes in residence require more careful analysis.

The bottom line

For ordinary employee equity, separate the timeline.

RSU: grant → vest → sale.

Option: grant → exercise → sale.

The employment-tax charge generally happens at vest for an RSU and exercise for an unapproved option.

The later sale is a separate CGT event.

The most valuable habit is therefore simple:

Save the market value and euro value on every vest and exercise date before you ever sell the shares.

That gives you the records needed to work out the later gain correctly.

Use the Capital Gains Tax Calculator for a straightforward sale, read the Capital Gains Tax guide for payment and filing rules, and use Investment Tax in Ireland for the wider tax treatment of direct shares and dividends.