Financial Planning for Google Employees

22% vs 37%

Standard federal withholding on GSUs versus the top federal bracket. In front-loaded years, the gap can come due in April.

2026 Update

Google’s Voluntary Exit Programs

In early 2026, Google was reported to offer voluntary exit packages to employees in several groups as it reorganized around AI. A voluntary exit is a financial decision with a deadline: the package, the GSUs you would give up, and the tax year it lands in all need to be weighed together.

Read the full paper: Laid Off, Not Retired →  ·  After the Front Load →

How GSUs Are Taxed

A GSU (Google Stock Unit) is Google’s name for a restricted stock unit in Alphabet stock. Each GSU is ordinary income when it vests, valued at that day’s price, and reported on your W-2. Your cost basis is the vest-day value, so only later price changes are capital gains or losses.

• Monthly vesting means twelve small income events a year per grant, not one large one.
• Shares are typically sold to cover withholding; the rest are yours to keep or sell.
• Washington has no state income tax on vesting income.

Read the full paper: How RSUs Work and Are Taxed →  ·  Understanding Your Stock Compensation →

Front-Loaded Vesting and the Withholding Gap

Front-loaded grants can push total income into the 32%, 35%, or 37% bracket in your first years, while GSU withholding usually stays at 22%. The difference shows up as a balance due when you file.

• Project the year’s GSU income early and adjust withholding or estimated payments with your CPA.
• High-income years can be the right time for larger pre-tax savings and charitable gifts.
• Plan the household budget for the step down when the front load ends.

Read the full paper: After the Front Load: Planning Around GSUs That Pay the Most Early →

The Mega Backdoor Roth in the Google 401(k)

For 2026, employees can defer up to $24,500, and total 401(k) contributions can reach $72,000 when the plan accepts after-tax money. Converting after-tax dollars to Roth inside the plan can let future growth be tax-free.

• Make sure your regular deferrals capture the full employer match first.
• After-tax room is roughly the total limit minus your deferrals and the match.
• Front-loaded years are often when the extra savings capacity exists.

Read the full paper: The Mega Backdoor Roth →  ·  Roth vs. Traditional Retirement Contributions →

Concentrated Alphabet Stock and Washington’s Capital Gains Tax

Holding vested GSUs is a decision to own more Alphabet stock, alongside your salary, bonus, and unvested grants from the same company. Selling shares held for years can trigger federal long-term capital gains tax and Washington’s capital gains tax.

• Washington taxes long-term capital gains at 7% above an annual deduction (about $270,000, adjusted each year) and 9.9% on the portion above $1 million, under the 2025 law change.
• Recently vested shares usually carry little gain, so they are often the cheapest to diversify.
• Giving appreciated shares instead of cash can avoid the gain on those shares; review with your CPA.

Read the full paper: The Concentration You Bought Back →  ·  Managing Concentrated Stock for Technology Professionals →

Changing Jobs or Facing a Layoff

Unvested GSUs generally stop vesting when employment ends. Because grants vest monthly, a departure date costs less than with annual vesting, but refreshers and front-loaded grants can still leave meaningful value on the table.

• List every remaining vest by month before setting a date.
• Decide what to do with the Alphabet shares you keep before the new offer’s equity starts.
• Review 401(k) rollover options and any after-tax balances.

Read the full paper: Laid Off, Not Retired →  ·  Employment Change and Layoffs in Tech →

Five Questions Before Your Next GSU Vest

1. What share of our net worth is Alphabet stock, counting unvested GSUs?
2. Is 22% withholding enough for this year’s income?
3. Which shares would we sell first, and what would each cost in tax?
4. Are we using the 401(k) match and after-tax room in the high-income years?
5. What does our budget look like when the front load ends?

What is a GSU?

A Google Stock Unit, Google’s name for a restricted stock unit in Alphabet stock. It becomes ordinary income when it vests, valued at that day’s share price.

Why is my tax bill highest in my first years at Google?

Front-loaded vesting puts more stock income in the early years, often pushing total income into a higher bracket than salary alone, while withholding usually stays at 22%.

Should I sell GSUs when they vest?

The income is taxed at vest either way, so selling then is close to tax-neutral. Holding is a decision to concentrate in Alphabet; we help set a target and a selling plan.

Do I own GOOG or GOOGL?

GSUs are generally delivered as Class C (GOOG) shares. Class A (GOOGL) shares carry voting rights. The two usually trade at similar prices; check your brokerage account.

Does Google offer an ESPP?

No. Google does not currently offer an employee stock purchase plan, so savings beyond GSUs come from the 401(k), after-tax contributions, and taxable investing.

Do I pay Washington capital gains tax on GSUs?

Not at vest: vesting income is wage income, and Washington has no state income tax. The state capital gains tax can apply when you sell shares held more than a year at a gain above the annual deduction.