Composite case study · Tech
Tech worker with $108K RSU vesting
How a senior engineer in Calgary (Alberta) cut tax bill from $46K to $32K via strategic RRSP timing in the vesting year
Composite illustration — not a single real client
This case is built from patterns across 5+ real clients and modified so no individual can be identified. Numbers are ranges, not exact values. The category + framework + decision logic reflect actual practice; specific details are abstracted. Not a recommendation for your situation — book a discovery call for individual setup.
Updated:
Client context (anonymized)
Category: senior software engineer, 2 years in Canada, employer — public US-tech company with Canadian payroll. Residence: Calgary, Alberta. Married, no kids yet. Compensation: base $140K CAD, RSU grant 4-year vest with 1-year cliff, first cliff in 2026 ~$108K CAD FMV. ESPP: 15% discount, two 6-month periods. Existing: ~$15K TFSA, RRSP room ~$25K, no real estate, no FHSA.
Three key questions we asked together
1) Max RRSP in vesting year or save room for future vest events? 2) What to do with vested RSU shares — hold, sell all, or partial? 3) How to integrate ESPP discount into overall strategy?
Framework applied
Q1: Max RRSP. Logic: marginal jumps to ~44% combined in vesting year. $33,810 RRSP = ~$14,800 immediate refund. In non-vesting years marginal ~36% → deferring would cost $2,700. Q2: Sell 80% vested immediately. Concentration risk. 80/20 split for diversification + optional upside. Reinvest $87K (80% × $108K post-tax) into XEQT/VEQT. Q3: Max ESPP, sell at purchase. 15% discount = locked-in arbitrage.
Quantified result (estimation)
Without planning: $46K tax on RSU income → net keep $62K, + 100% concentration in employer stock. With strategy: $46K - $14.8K RRSP refund = ~$31K effective tax → net keep ~$77K. Diversification: 20% remains in employer stock, 80% in broad-market ETF. Pattern compounds across subsequent vesting cycles.
What we did NOT do (and why)
Did NOT recommend specific MIC/REIT/exempt market products (NI 31-103 prohibits such promotional recommendations in public marketing). Did NOT promise specific returns. Did NOT use FHSA (no home-purchase intent in next 5 years).
Lessons applicable
1) RSU vesting year ≠ regular year. Stratify RRSP contributions. 2) Concentration risk in employer stock — most common mistake. 80/20 split is baseline. 3) ESPP discount = locked-in return; holding shares = added risk, not added value. 4) High income doesn't always mean RRSP beats TFSA — depends on year-type. 5) Tax refund from RRSP = capital, not bonus. Reinvest.
Key takeaways
- 1.Vesting-year marginal rate: ~44% (AB), ~50-53% (ON/BC) — max RRSP makes sense
- 2.Concentration risk: >20% of net worth in employer stock is double exposure
- 3.ESPP 15% discount + sell-at-purchase ≈ 58% annualized arbitrage
- 4.RRSP refund → reinvest in TFSA + FHSA (don't consume)
- 5.Strategy repeats each vesting cycle — compound effect
What if...
If the client lived in Ontario, not Alberta?
Marginal on vesting income ~50-53% vs 44%. RRSP refund grows to ~$17K. Same strategy, even more justified.
If base were $250K, not $140K?
RSU partly hits top federal bracket (33%). Worth discussing IPP setup via CCPC if there's side consulting income. Pure W-2 — strategy same, RRSP cap $33,810 fixed.
If employer is in the US?
Form W-8BEN required (stops 30% US withholding). FBAR doesn't apply to Canadian residents without US citizenship. RSU FMV in T4 — Bank of Canada rate on vesting day. Keep US shares in RRSP (treaty exemption is RRSP-only).
Let's discuss your specifics?
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