Your RSU grant, turned into a year-by-year vesting schedule.

How does a standard 4-year RSU vesting schedule with a 1-year cliff work?

Nothing vests for the first 12 months — that's the cliff. At the 1-year mark, a pro-rata chunk vests all at once, typically 25% of the total grant for a 4-year schedule. The remaining 75% then vests in equal installments — monthly, quarterly, or annually depending on your employer's plan — over the remaining 3 years.

What happens to unvested RSUs if I leave the company?

Unvested RSUs are almost always forfeited when you leave voluntarily or are terminated for cause — vesting is specifically the mechanism that requires continued employment to earn the grant. Some companies offer accelerated vesting in an acquisition or layoff scenario, but that depends entirely on your specific grant agreement, not a general rule.

How are RSUs taxed when they vest?

In most countries, RSUs are taxed as ordinary income at the fair market value on the vesting date, not the grant date — that's what the withholding rate above estimates. Any gain or loss after that, if you hold the shares rather than selling immediately, is typically taxed separately as a capital gain or loss when you eventually sell. Exact treatment varies significantly by country, so confirm with a tax professional for your specific situation.

Why does the vesting frequency matter?

More frequent vesting means smaller, more regular batches of shares becoming yours — and taxable — rather than large lump sums, which can make withholding and selling decisions smoother. But the total number of shares and total value over the full schedule is identical either way; frequency changes the shape of the payout, not the total amount.

Worked example: a grant of 4,000 shares at $50/share (a $200,000 grant), 4-year vesting with a 1-year cliff, quarterly vesting after the cliff, 0% assumed price growth: 1,000 shares (worth $50,000) vest in each of the 4 years, for a total pre-tax value of $200,000 — and $156,000 after a 22% withholding rate.