By duozhandian Of course. Here is a detailed explanation of the “refund of earnings from the restricted value at bonus vesting,” a common concept in equity compensation, particularly **Restricted Stock Units (RSUs)**.
### **Core Concept: The “Refund” is Actually a Tax Withholding**
The term “refund” can be misleading. What actually happens is a **mandatory sell-to-cover transaction** to pay your income tax and social security liabilities at the moment the restricted units vest (become yours).
When your RSUs vest, the **full fair market value of the shares on that day** is considered **ordinary income** and is added to your salary for tax purposes. Your employer is legally required to withhold taxes on that income.
Since the income is in the form of shares, not cash, the company sells a portion of those *newly vested* shares on your behalf to generate the cash needed to pay the tax authorities. This is the “refund” or “recovery” of the earnings’ value.
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### **Step-by-Step Breakdown of the Process**
Let’s use a concrete example:
* **Grant:** You were granted **100 RSUs**.
* **Vesting Date:** Today, 25% (25 shares) vest.
* **Share Price:** The stock price on the vesting date is **$100 per share**.
* **Withholding Tax Rate:** Assume a combined (federal, state, social security) **withholding rate of 40%**.
**1. Taxable Event Creation:**
* 25 shares vest.
* Their total value is **25 shares * $100 = $2,500**.
* This $2,500 is reported as ordinary income on your W-2 for the year.
**2. Tax Withholding Calculation:**
* The required tax withholding is **$2,500 * 40% = $1,000**.
**3. The “Sell-to-Cover” Transaction (The “Refund”):**
* To get the $1,000 for the tax payment, the company’s broker will automatically sell a number of your *newly vested* shares.
* Number of shares sold = **$1,000 / $100 per share = 10 shares**.
* These 10 shares are sold on the market, and the $1,000 proceeds are sent by your employer to the tax authorities on your behalf.
**4. What You Receive (Net Settlement):**
* You started with 25 vested shares.
* 10 shares were sold for taxes (“refunded”).
* **You are left with 15 shares** deposited into your brokerage account.
* You also now have a **cost basis of $100 per share** for those 15 shares (important for future capital gains tax when you sell them).
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### **Key Terminology Clarification**
* **Valor Restrito (Restricted Value):** The total value of the shares that have vested ($2,500 in our example).
* **Ganhos (Earnings):** This is the same as the “restricted value” at vesting. It’s the compensation you are earning.
* **Reembolso (Refund/Recovery):** The portion of that value that is “recovered” via the sale of shares to cover the mandatory tax withholding. It’s not a refund to you; it’s a recovery of value by the company to fulfill its tax obligation *on your behalf*.
### **Important Considerations**
1. **You Never Get Cash:** In a standard sell-to-cover, the cash from the sale goes directly to the tax authorities. You don’t receive it.
2. **Withholding Rate is an Estimate:** The rate used (e.g., 40%) is an estimate. Your actual total tax liability will be calculated when you file your annual tax return. You may owe more or get a refund depending on your total income.
3. **Alternative: Paying Cash:** Some plans allow you to submit a personal check to cover the taxes instead of selling shares. This lets you keep all the vested shares.
4. **Subsequent Sale:** When you later sell the 15 net shares you received, that is a new taxable event. You will pay **capital gains tax** on the difference between your sale price and the cost basis ($100 per share).
### **Summary**
The **”reembolso de ganhos do valor restrito no vencimento do bônus”** is the **automatic, mandatory sale of a portion of your vested equity (like RSUs) to cover income and payroll taxes**. It is not a penalty or a fee, but a standard payroll withholding process, similar to taxes being withheld from your paycheck. The result is that you receive a **net amount of shares** after taxes.
**In short: Vested Value = Tax Withholding (via sale of shares) + Net Shares Deposited to You.**