Your Cheat Sheet To Amazon RSUs
Updated: 3/11/2026
Tech employees at large companies like Amazon, Google, and Meta know that their compensation package includes far more than just a paycheck. From Amazon’s life insurance benefits to their 401(k) matching, the company offers many enticing benefits to attract and retain top talent!
One such benefit is being granted Amazon Restricted Stock Units, also known as RSUs. If you work at Amazon, there’s a good chance that you are eligible to receive these – and they can be an incredible way to build your wealth!
Curious to learn more? Let's dive into Amazon RSUs, how they work, and how to maximize your benefit!
What is an Amazon RSU?
Restricted stock units, or “RSUs” for short, allow companies to grant shares to their employees. This is a form of equity compensation that many tech companies give to their employees in addition to their regular salary. RSUs share some similarities with NQSOs and ISOs, but differ in terms of vesting schedules, taxation, and the type of compensation you’ll receive.
While “traditional” stock options can effectively lose their value if the company stock price is below the “strike” or “exercise” price, that’s not the case for RSUs. They’re usually worth something, regardless of how low stock prices get (assuming the company stays in business!). That means these equity awards can be quite valuable.
Employees who receive RSUs from their employer can’t use them until they “vest” – that is, until they get converted from restricted units to actual shares of stock. The exact RSU vesting schedule varies between companies, but this essentially incentivizes an employee to remain with the company for several years.
Once they vest, your RSUs will be considered taxable earned income. Your earned income is a simple calculation of the stock price on the day of vest multiplied by the number of shares vesting that day.
Example: Let’s say you have 30 shares vesting today, and the current stock price is $200 per share. You will have $6,000 of taxable income recognized today.
Does Amazon Give RSUs To Employees?
As of 2026, the majority of Amazon employees are eligible for RSUs. There are some exceptions, however. If you work fewer than 30 hours each week, for example, you are considered ineligible for these stock grants. Additionally, employees at certain job levels cannot receive RSUs. Assuming you don’t fall into either of these categories, Amazon should extend this benefit.
How Many RSUs Do Amazon Employees Get?
There isn’t a static number of RSUs that all Amazon employees receive when they get hired. Instead, you’ll receive a certain number as part of your compensation package, based on the target compensation level of your level and role. That is partially due to Amazon’s desire to align its employees’ interests with its interests as a company. By letting its workers own a small portion of the business, Amazon hopes to encourage them to prioritize its success.
When you start working at Amazon, you’ll receive an RSU Award Summary. Amazon employees often get additional RSU grants on an annual basis, most commonly during their annual review and compensation adjustment which happens in Q1 of each year. If you’re new, you typically won’t get additional shares awarded at your first review, so don’t be alarmed if this happens to you.
When Do the RSUs Vest?
While most employee RSU grants vest at a rate of 25% each year over the course of four years, that isn’t the case at Amazon.
Instead, their on-hire RSU vesting schedule works as follows:
Year 1: 5% vest at the end of your first year
Year 2: 15% vest at the end of your second year
Year 3: 40% vest (typically split into two 20% vests)
Year 4: 40% vest (typically split into two 20% vests)
Example Scenario
Let’s say you are granted $160,000 in Amazon RSUs at a grant-date price of $200 per share. This equals 800 shares.
Here’s how that grant would be vested over the next four years:
Year 1: 5% (40 shares) vests at your one-year anniversary.
Year 2: 15% (120 shares) vests at your second anniversary.
Year 3: 20% (160 shares) vests at 30 months, and another 20% (160 shares) at 36 months.
Year 4: The 40% remainder (320 shares) vests over the final year.
Receiving Additional RSUs
Once you’ve completed your second year with Amazon, you’ll be eligible for another RSU grant. Depending on how the stock performed and how you’re ranked in your role, you may or may not receive more RSUs. But even if you do, they typically won’t vest until at least year 4 and sometimes year 5.
RSU grants awarded during annual performance reviews almost always vest in May and November of each year. They don’t necessarily follow an even schedule either, so don’t expect 100 shares perfectly distributed to vest 25 every May and November. Amazon is one of the few companies that uses the stock value at vest to determine your target compensation band in that current compensation year. Many companies ignore the value at vest and instead determine their award value at grant, regardless of what those shares are worth at vest.
Once your sign-on stock grant is fully vested after year 4, things get a bit simpler because your vesting will almost always follow a May/November schedule.
There are some exceptions to this, like if you take a leave of absence, or are at a level in which you receive quarterly vests. But the vast majority of employees who are receiving RSUs vest on this May/November schedule.
Note on Monthly Vesting
As of 2026, many Amazon employees (particularly at higher levels or in specific engineering roles) have transitioned to monthly vesting after their first or second year. Check your specific grant on Morgan Stanley StockPlan Connect to see if your schedule has been modernized to a monthly cadence.
Tax Treatment
Of course, it’s wise to have an investment plan in place for your RSUs well before they hit their vesting date. When that time comes, you’ll have two basic options to get started:
Selling RSUs for taxes. To take this option, sell enough shares to pay off the withholding taxes on the value of your shares. Then, hold the rest of the proceeds in Amazon shares. Keep in mind, you’ll get the shares based on their price on the vesting date. This is called a “sell-to-cover” transaction and the default is 22%. Meaning, if you receive 100 shares, they will automatically sell 22% of them and send them in for Federal tax withholding. Early in the year, withholding will be slightly higher to cover Medicare and Social Security tax as well, typically 28% total withholdings.
This default is the minimum recommendation and best practice for vesting shares. We do not recommend that you change this to not withhold for taxes and instead plan to pay your tax bill with cash at the end of the year.
Selling RSUs for cash. That is as simple as it sounds–you’ll sell your shares and get the proceeds. Note that this will still incur the default sell-to-cover amount listed above, and it should, so that you don’t potentially have a large, unexpected tax bill at the end of the year.
Note that depending on the level of your RSU income, the 22% sell-to-cover default will be nowhere near enough tax. If you find yourself owing a lot of taxes each year, you may want to increase your default withholding amount. You can do this on your internal page: www.amazonstock.com
What is Amazon’s RSU 20% Cash Option?
While this initially began as a pilot program only available by invitation, it’s now an established election for most US-based L4-L8 employees.
In a nutshell, the Amazon RSU cash option allows employees to take 25% of their Amazon RSUs in cash instead of stock. The remaining 75% is granted as a traditional stock compensation package.
Is this cash option a good fit for you and your financial goals? As with most things in the realm of finance, there’s no one-size-fits-all answer. The program has both pros and cons. Read our dedicated blog on Amazon’s RSU 25% Cash Option for a more in-depth exploration of what to consider before enrolling.
Tips for Reducing Amazon RSU Taxes
RSUs can have a significant impact on your tax liability – especially since in some cases, your RSUs may even be taxed twice. That said, there are a few strategies you can use to reduce taxes on RSU income.
To start, be sure to adjust your tax withholding if necessary. As mentioned above, the default sell-to-cover rate of 22% isn’t always enough to cover what you’ll owe. Withholding more of your RSU income will reduce the amount of interest and penalties the IRS may charge for tax underpayments.
You can also choose to sell your RSUs immediately after vest. By selling them right away, you can avoid incurring a capital gains tax since the stock hasn’t had time to increase (or decrease) in value.
Be sure to investigate other tax planning strategies for high-income earners, too. General tax-savvy moves like maximizing your tax-deductible accounts, making charitable contributions, and leveraging tax-loss harvesting can reduce your overall tax liability.
What Can Be Done with RSUs After They Vest?
After you’ve figured out how to collect your RSUs, it’s time to decide what you want to do with the money. There are countless investment opportunities worth considering, such as:
Boosting your 401(k) contributions. If you’re having trouble maxing out your 401(k) with just your base salary, you can sell shares to boost your cash position, allowing for larger 401(k) contributions. Note that you cannot contribute RSUs directly to your 401(k). The only way to contribute to a 401(k) is through a payroll deduction.
Contributing to a 529 account. Are you trying to support your children’s higher education? If so, a 529 account can help you prepare for that.
Adding to your personal savings. If you don’t have any pressing financial issues to deal with, RSUs can make it easy to build a nest egg.
Preparing for emergencies. No one knows what will happen to their finances in the future. For people who haven’t already created an emergency fund, this is the perfect time to do so. Also, many Amazonians are subject to trading windows which means they can’t sell whenever they want! Don’t get caught needing cash while you can’t sell your shares! (this happens to at least a handful of our clients each year)
Have some fun. It’s not all about saving. We advise our clients on how to spend their money (responsibly) so they get to enjoy the lifestyle they want while still achieving their financial goals.
How to Know You’re on the Right Path
When you understand how they work and have a solid investment strategy, Amazon RSUs can serve as a considerable contribution to your wealth building. Despite this, trying to manage RSUs and other benefits without having confidence or context can lead to spending too much or saving too little.
Take control of this financial opportunity and get a plan in place. It’s a good idea to get expert advice on how you can utilize your RSUs to the fullest. It’s important to work with a financial planning firm that specializes in your unique compensation structure. It makes your life easy so you don’t have to explain all the intricacies of your company's benefits! Also, make sure that the firm you’re working with is a fiduciary, and make sure your advisor or advisory team consists of CERTIFIED FINANCIAL PLANNER(™) professionals.
That’s why you should consider working with Consilio Wealth Advisors while creating a plan for your Amazon RSUs. Consilio specializes in working with tech professionals and we make a point of communicating clearly and simply (without the jargon) with our clients. If you’re looking for financial professionals who see the people they work with as people, set up a call.
DISCLOSURES
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
Consilio Wealth Advisors is not affiliated with Amazon. While CWA communicates with its clients regarding their Amazon employee benefits, and educates itself on Amazon Benefits, there is no guarantee that the information we have provided is accurate. Amazon employees are encouraged to contact their employer should they have any questions regarding their specific employee benefits. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
Consilio Wealth Advisors, LLC (“CWA”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where CWA and its representatives are properly licensed or exempt from licensure.
