Equity compensation
Google's restricted stock (GSU) vesting schedule, explained
Google does not call them RSUs. The restricted stock that makes up a large share of pay for most Googlers is a Google Stock Unit, or GSU, and it comes with a vesting schedule that is unusual in big tech: for most new-hire grants since 2021 it is front-loaded, so the first two years deliver two-thirds of the grant. This page walks through how the schedule works, how the older schedule differed, how refresh grants stack on top, and what happens for tax on each vest date.
What a GSU actually is
A GSU is Alphabet's name for a restricted stock unit. In its 2025 annual report (Form 10-K), Alphabet describes it plainly: under the Alphabet 2021 Stock Plan, "an RSU award is an agreement to issue shares of our Class C stock at the time the award vests," and "RSUs generally vest over four years contingent upon employment on the vesting date." The shares you receive are Class C (ticker GOOG), which carry no vote. The filing also notes that GSUs are awarded dividend equivalents, which vest on the same schedule as the underlying units and settle in Class C shares.
Until a GSU vests you own nothing. There is no tax, no vote, no dividend paid to you, and if you leave the company the unvested units are forfeited. On the vest date the units convert to shares, the shares land in your stock plan account, and the value becomes wages. For the general mechanics of how RSUs are taxed, see our RSU taxes guide; the rest of this page is Google-specific.
The vesting schedule: current and older versions
The front-loaded schedule (new-hire grants since 2021)
Alphabet's filings say only that GSUs "generally vest over four years." The year-by-year split is not published by the company, but it is consistently reported. In 2021 Google moved new-hire grants from an even four-year schedule to a front-loaded one; myStockOptions, citing a September 2021 Business Insider report, describes the new split as 33% in each of the first two years, 22% in the third and 12% in the fourth, and Levels.fyi reports that most Google offers since summer 2021 carry the same 33/33/22/12 schedule.
| Year after grant | Share of grant vesting (reported) | On a $200,000 grant (grant-date value) |
|---|---|---|
| Year 1 | 33% | $66,000 |
| Year 2 | 33% | $66,000 |
| Year 3 | 22% | $44,000 |
| Year 4 | 12% | $24,000 |
Within each year, vesting is reported to happen in frequent installments rather than one lump: employee reports on Blind and advisor write-ups describe monthly vesting for grants of a meaningful size, with no one-year cliff for recent hires. Google has not published this, and your grant notice is the only document that governs your dates. Read the vesting schedule in the stock plan portal before you plan around it.
The older even schedule
Before 2021, Google grants vested evenly at 25% a year over four years. Levels.fyi reports that under that older regime the frequency of installments depended on the size of the grant in units: small grants vested annually, mid-sized grants semi-annually or quarterly, and large grants monthly. Googlers hired before mid-2021 may still have a tail of these grants vesting alongside newer refreshers.
Why front-loading matters
Front-loading changes two things. First, total compensation in years one and two is higher than a 25% schedule would deliver, which makes offers look larger. Second, unless refresh grants fill the gap, pay from the new-hire grant drops by a third in year three and by almost two-thirds in year four. That is the trade: more money sooner, and a steeper decline later. You can model any schedule, including this one, with the RSU vesting schedule calculator, which has a Google preset built in.
For comparison, Amazon back-loads its RSUs (5% and 15% in the first two years, 40% in each of the last two), the opposite shape. Google's design pays you earlier; Amazon's pays you for staying.
Refresh grants and how they stack
Alphabet's careers site lists "regular bonus and equity refresh opportunities" among its financial benefits. In practice most Googlers receive an additional GSU grant each year as part of the annual compensation cycle, sized by level and performance. Levels.fyi reports that new hires become eligible for refreshers at the end of their first year, and employee reports describe refresh grants vesting evenly at 25% a year rather than on the front-loaded new-hire schedule.
Because each grant runs its own four-year clock, after a few years you are vesting from several grants at once: the tail of your new-hire grant plus two or three refreshers. The stacking is what smooths out the year-three and year-four drop in the new-hire grant. It also means your stock income in any given year is the sum of several schedules, each priced at a different grant date, and it is easy to lose track of how much is coming when. A simple spreadsheet listing each grant, its unit count and its vest dates is worth keeping; it is also the input you will need when you start thinking about how GSUs compare to salary in an offer or a promotion.
What happens on a vest date for tax
Vesting is wages
On each vest date, the fair market value of the shares delivered is ordinary income, reported on your W-2 alongside salary. It is taxed at your regular federal and state rates, plus Medicare, and Social Security until you pass the annual wage base. Nothing about holding the shares afterward changes that first tax bill.
How Google withholds
Alphabet's 10-K states that for RSUs "shares are issued on the vesting dates net of the applicable statutory income tax withholding to be paid by us on behalf of our employees. As a result, fewer shares are issued than the number of RSUs vested." In other words Google uses net share settlement: it keeps back enough shares to cover the withholding and remits cash to the tax authorities, rather than selling your shares on the open market. The effect on you is the same as a sell-to-cover: you receive fewer shares than vested.
The withholding rate is the problem. Equity vests are supplemental wages, and the IRS default in Publication 15 (2026) is a flat 22% federal rate, rising to a mandatory 37% only on supplemental wages above $1 million in the year. A Googler earning $350,000 to $600,000 is in the 32% or 35% federal bracket, so each vest is under-withheld by 10 to 13 points before state tax. On $150,000 of annual vests, that is a $15,000 to $20,000 federal shortfall that arrives as a bill in April, with possible underpayment penalties on top. The RSU tax calculator estimates the gap; the fix is to pay quarterly estimates or add extra withholding through your W-4.
Cost basis and the monthly-lot problem
Your cost basis in each lot of vested shares is the vest-date price, the same amount that went on your W-2. If you vest monthly, you will accumulate a dozen small lots a year, each with its own basis and holding period. Brokers' 1099-B forms for RSU shares often show a basis of zero or omit it, and if you copy that onto your return you will pay tax twice on the same income. Keep the vest confirmations.
Sell at vest, or hold
Selling on the vest date creates almost no additional tax, because the sale price and the basis are nearly identical. Holding converts future movement into capital gain or loss: short-term if you sell within a year of the vest date, long-term after that. Lower long-term rates are only a benefit if the stock goes up; they are not a reason to hold by themselves.
The stronger argument concerns concentration. Your salary, bonus, unvested GSUs and future refreshers already depend on Alphabet. Holding vested shares adds more of the same exposure. A useful test: if Google paid this vest in cash, would you buy GOOG with it today? If the answer is no, sell and invest the proceeds in something diversified. If the answer is a confident yes, hold a deliberate amount and set a ceiling, for example no more than 10% to 15% of your investable assets in any single stock. Googlers who are designated insiders or subject to trading windows should check the company's insider trading policy before placing orders; a standing sell-at-vest instruction in the stock plan account is often the simplest way to stay compliant.
GSUs are only one piece of the package. The 401(k) match, after-tax contributions and the rest are covered in our Google employee benefits guide.
Common mistakes
- Reading the grant value as annual income. A front-loaded grant pays a third in year one and only 12% in year four. Divide by the schedule, not by four.
- Assuming the 22% withholding covers the tax. For most Googlers with meaningful equity it does not. Budget for the gap or make estimated payments.
- Reporting a zero cost basis. The vest-date value was already taxed as wages. Use it as your basis when you sell.
- Holding by default. Not deciding is a decision to concentrate. Make the hold-or-sell call on purpose.
- Forgetting the year-three drop. If refreshers are smaller than expected, total pay falls. Plan spending on salary plus a conservative estimate of vests, not on peak year-one income.
Bottom line. Google's GSUs vest over four years, front-loaded 33/33/22/12 for most grants since 2021 (reported; the company's filings say only "generally vest over four years"), with refreshers layered on top. Every vest is taxed as wages at the vest-date price, Google withholds shares at the 22% federal default, and the shortfall against your real bracket is yours to cover. Sell-or-hold is a concentration decision, not a tax one.
Your own grant notices, the stock plan portal and the Alphabet 2021 Stock Plan document govern your vesting dates and percentages; withholding rules come from IRS Publication 15. Verify both before acting on anything here.