Step-by-step · 4 min read
Google stock units (GSUs)
Google stock units are Google's name for restricted stock units. They follow the same tax rules as any RSU: each vest is wage income, and the value at vest is your cost basis.
What makes GSUs worth their own guide is the pattern. New-hire grants, yearly refresh grants and frequent vests stack on top of each other, so your stock income often grows every year even when your salary does not. Most Googlers we meet are under-withheld by more than they expect, and many hold more Alphabet stock than they would choose to buy with cash.
- Who it fits
- Googlers and former Googlers holding Alphabet stock units.
- Usually not a fit
- Anyone who already follows the RSU guide and has no Google equity.
- Figures
- 2026 tax year
The key rule
Each GSU vest is ordinary wage income at the market value of the Alphabet shares that day. Google withholds tax by keeping back shares. The value at vest becomes your cost basis for any later sale.
How it works
GSUs are delivered as Alphabet Class C shares (ticker GOOG). On each vest date, the shares that vest are added to your equity account, some are withheld to pay tax, and the rest are yours to keep or sell.
Your schedule depends on when each grant was made. Recent grants commonly vest monthly or quarterly, and some are front-loaded, with more vesting in the early years than the later ones. Each refresh grant has its own schedule, so in any given month you may have several grants vesting at once.
The income from each vest shows up on your pay stub and in your W-2 for the year. The tax withheld also appears there, usually at the flat federal supplemental rate of 22% (37% above $1 million of supplemental wages for the year).
7 steps
Map every grant you hold
Download your grant list from your equity account. For each grant, write down the total units, units already vested, units left and the vesting schedule. A simple spreadsheet with one row per month makes the year's income easy to see.
Estimate this year’s GSU income
Add up the units vesting this calendar year and multiply by a conservative share price. Add salary and bonus. That is the income your tax bracket is based on.
Compare withholding with your bracket
If your top federal rate is above 22%, plan to make up the difference. For a Googler in the 32% to 37% bracket, the gap is often $10,000 to $40,000 a year. Check your state too.
Close the gap
Use one of these, or a mix:
- Elect a higher withholding rate on stock income, if that option is offered to you.
- Add extra withholding to each paycheck with a new W-4.
- Make quarterly estimated payments.
We will give you the amount when we run your projection.
Set a selling rule
Decide ahead of time what you do with each vest: sell all, sell a fixed share, or hold up to a target. Writing it down keeps you from building a large single-stock position by accident. If you are subject to trading windows, plan sales inside open windows or ask whether a 10b5-1 plan would help.
Watch Class C and Class A
GSUs are Class C (GOOG). If you also own Class A (GOOGL) in another account, remember they are two different securities for most purposes, but selling one at a loss and buying the other right away could still be questioned as a wash sale. Talk to us before doing that.
Reconcile your 1099-B every year
Shares withheld for tax and shares you sell show up on your 1099-B, often without the correct basis. We match each sale to its vest so you are not taxed twice.
Example 1
Stacking grants
You joined three years ago with a grant vesting about $120,000 a year, and you have received two refresh grants that now add $60,000 and $50,000 a year. Your salary is $210,000. Your wages for the year are about $440,000, not $210,000, and every dollar of GSU income was withheld at 22% while your top rate is 35%.
Example 2
Moving out of state
You worked in California for two years of a grant's four-year vest, then moved to Texas. California can still tax part of each later vest from that grant, based on the share of workdays between grant and vest spent in California. See the state residency guide.
Common mistakes
- Treating each year's withholding as enough because last year was fine. Refresh grants keep raising your income.
- Holding most of your net worth in Alphabet because selling feels like a tax event. Selling soon after vest creates almost no extra tax.
- Using the 1099-B basis without the supplemental statement.
- Forgetting that excess Social Security tax from two employers in the same year is refundable when you file.
Key dates
- Each vest date
- Income and withholding happen automatically.
- Quarterly estimate dates
- April 15, June 15, September 15 and January 15.
- Open trading windows
- Plan sales here if you are subject to blackout periods.
Questions we hear
Does Google give me a separate tax form for GSUs?
No. GSU income is on your W-2. Sales appear on the 1099-B from the broker that holds the shares.
What happens to unvested GSUs if I leave?
Unvested units are usually forfeited on your last day. Check your grant agreement. See the guide on leaving your job.
What to send us
- Your GSU grant list and vest schedule
- Your year-end pay stub
- The 1099-B and supplemental statement
- Any move dates if you changed states
Upload them to your client portal.
General education for TaxSquad clients, not advice for your situation. Rules and figures change. Talk to us before acting on this guide.