Promoted at Amazon? What to Do Now That Your RSUs Are Bigger

A promotion at Amazon usually comes with a new RSU grant, and that grant can quietly become the biggest part of your pay. Congratulations are in order … but so is a plan.

At Amazon, stock often makes up a large share of total compensation, especially as you move up levels. That means a promotion does more than raise your paycheck. It raises your tax bill, increases how much of your net worth rides on one company, and adds new vesting dates to track. Here is how to handle it.

1. Understand exactly what you were granted

Start by pulling up the new grant in your stock plan account and writing down three things: the number of shares, the vesting dates, and how many shares vest on each date.

This matters because Amazon grants rarely vest evenly. New hire grants have historically been back-loaded, with most shares vesting in years three and four. Promotion grants can follow their own schedule. Stacked on top of your existing grants, you may end up with some years far heavier than others.

Also remember that Amazon builds compensation targets around an assumed stock price. If the stock goes up, your pay beats the target. If it goes down, your actual pay can land well below what your offer letter implied. Plan around shares and dates, not the dollar figure you were quoted.

2. Watch for the withholding gap

When RSUs vest, the value is taxed as ordinary income, just like salary. The problem is how much gets withheld.

For federal taxes, RSU income is usually treated as supplemental wages and withheld at a flat 22% (37% on supplemental wages above $1 million in a year). After a promotion, many Amazon employees land in the 32%, 35%, or even 37% bracket. The difference between 22% withheld and what you actually owe can easily add up to a five-figure bill in April.

If you live in New York or New Jersey, state and local taxes add another layer. New York City residents pay city income tax on top of state tax.

What to do:

• Run a tax projection for the year using your new salary and expected vests

• Make estimated tax payments, or increase withholding on your paycheck through a new W-4

• Set aside cash from each vest to cover the shortfall so it does not catch you by surprise

3. Check how much of your wealth is in Amazon

Your paycheck, your bonus, your career, and now a growing pile of shares all depend on one company. That is a lot of eggs in one basket.

Add up everything you hold in AMZN: vested shares, unvested shares, and any Amazon stock in your 401(k) or brokerage account. Then compare it to your total net worth. Many advisors flag concentration once a single stock passes 10% to 15% of your portfolio.

A helpful test: if you received your vested shares as cash today, would you use all of it to buy Amazon stock? If the answer is no, holding them is the same as making that bet.

4. Decide on a selling plan before the next vest

The easiest time to make a calm decision is before shares hit your account, not the day the stock drops 8%.

A few common approaches:

• Sell at vest. Since RSUs are taxed when they vest, selling right away usually creates little or no additional capital gain. You lock in the value and diversify immediately.

• Sell a set percentage. Keep a portion, such as 25%, and sell the rest. This keeps some upside while steadily reducing risk.

• Set a cap. Decide the maximum share of your net worth you are comfortable holding in Amazon, and sell anything above it.

Once you sell, put the money to work on purpose: build your emergency fund, cover the tax gap, max out tax-advantaged accounts, and invest the rest in a diversified portfolio. If you already hold shares with large gains, a gradual plan spread across tax years can help manage capital gains.

5. Do not let your spending rise with your RSUs

RSU income is lumpy and depends on the stock price. Building fixed costs, like a bigger mortgage or a car payment, around it can leave you stretched if the stock falls or your grants shrink.

A good rule: base your lifestyle on your salary, and treat RSUs as fuel for long-term goals. That could mean a home down payment, paying off debt, funding a child's 529 plan, or reaching financial independence sooner. A promotion is one of the best chances you will get to speed up those goals.

Get a plan for your Amazon RSUs

A promotion is a big step forward. The decisions you make in the first year, about taxes, selling, and where the money goes, can shape your finances for a decade.

At Reliant Wealth Advisory, we help Amazon and other tech employees turn RSUs into a clear plan: when to sell, how much to set aside for taxes, and how to diversify without giving up on your goals. As a fee-only fiduciary, we do not sell products or earn commissions. Our only job is giving you advice in your best interest.

If you recently got promoted and want help mapping out your vests and tax bill, schedule an introductory call below.

Click here or book a time below:

About the Author

Michael Walstedt, CFA, CFP®, is the founder of Reliant Wealth Advisory, a fee-only fiduciary firm based in Hoboken, New Jersey. He helps tech professionals, executives, and business owners make smart decisions about equity compensation, taxes, and investing. Before founding Reliant, Michael spent years trading financial markets, giving him a practical, real-world view of risk and concentrated positions. He works with clients in the New York and New Jersey area and nationwide.

This article is for educational purposes only and is not tax, legal, or investment advice. Consult a qualified professional about your specific situation.