Updated: October 2026. Rules marked "Netherlands" apply to Dutch companies and employees. Everything else holds in most countries, but check the tax rules where you live.
RSUs, ESOPs and SARs all reward employees when the company grows in value, but they hand over very different things. An RSU (restricted stock unit) is a promise of free shares once you have stayed long enough. An ESOP is an employee share or option plan; in the US the term means a specific retirement trust, in Europe it usually means an option plan. A SAR (stock appreciation right) pays out the growth in share value, usually in cash, without the employee ever buying or holding a share.
RSU vs ESOP vs SAR at a glance
| | RSU | ESOP (option plan) | SAR |
|---|
| What the employee gets | Shares, for free, once vested | The right to buy shares at a fixed price | The value increase, usually paid in cash |
| Does the employee pay? | No | Yes, the exercise (strike) price | No |
| Does the employee become a shareholder? | Yes | Yes, after exercise | No |
| Value if the share price does not rise | Still worth the full share value | Nothing | Nothing |
| Typical user | Listed companies, mostly US tech | Start-ups and scale-ups | Companies that want to share growth without sharing shares |
Restricted Stock Units (RSUs)
With an RSU the company promises to deliver a number of shares once conditions are met, usually a few years of service and sometimes performance targets. The employee pays nothing. Because the shares are free, an RSU keeps value even if the share price falls, which is why it suits large, stable companies.
RSUs are mainly an instrument of listed companies, especially in the US. A listed company can deliver shares that the employee can sell the same day to pay the tax. A private company cannot, so its employees would owe tax on shares they cannot sell. That is why you rarely see RSUs in a Dutch or other European start-up.
Netherlands: the market value of the shares counts as salary when the RSUs vest and the shares are delivered. A Dutch appeal court confirmed this taxable moment in May 2026 (Gerechtshof Den Haag, 27 May 2026, via Taxence).
Employee Stock Ownership Plans (ESOPs)
In the US, an ESOP is a defined contribution retirement plan that holds company shares in a trust for employees, governed by US retirement plan law (NCEO). Employees usually receive the value when they retire or leave.
In Europe, founders and investors use "ESOP" for an employee stock option plan: employees get options to buy shares later at a price fixed today. That is the meaning in most European term sheets and in the rest of this article. Read more in our knowledge article on ESOPs and our guide to how options work.
Netherlands: employees of a BV often hold the shares through a foundation, a STAK, which issues them depositary receipts. They get the economic value of the shares, and voting stays with the foundation board. Since 1 January 2023 the option gain is taxed as salary at exercise, or later when the shares become tradable; the employee can choose in writing to be taxed at exercise (art. 10a Wet op de loonbelasting 1964). The value of the option when it is granted is never taxed, so granting early does not save tax. It does give your first employees a fair, lower entry price.
Stock Appreciation Rights (SARs)
A SAR is a contract that pays the employee the increase in value of a set number of shares between the grant date and the payout date. No shares change hands, there is no notary, and the employee has no voting rights. That makes SARs quick to set up and usable for employees in any country.
The trade-off is tax. Quintus Willemse, founder of Share Council, described them this way on the Equidam podcast: "Stock appreciation rights or virtual shares are, dishonourably said, nothing else than a bonus calculated in a very nice way, which carries the highest taxes on the gains."
Netherlands: Dutch law firms agree that a SAR payout is taxed as salary, with wage tax withheld by the employer, and that the company can usually deduct the payout from its profit (Kienhuis Legal; Blenheim).
A worked example in euros
Illustrative only. The numbers are made up to show the mechanics, not advice for your situation.
An employee at a Dutch company receives 1,000 units when a share is worth €5. Four years later a share is worth €20. We assume the employee already earns more than €78,426 a year, so every extra euro falls in the top Dutch income tax bracket of 49.50% (Belastingdienst, 2026 rates). Lower earners pay less.
| | 1,000 RSUs | 1,000 options, strike €5 | 1,000 SARs, base €5 |
|---|
| Employee pays | €0 | €5,000 to exercise | €0 |
| Taxable as salary | €20,000 (full share value) | €15,000 (€20,000 minus €5,000) | €15,000 (payout) |
| When it is taxed | At vesting | At exercise, or later when the shares become tradable | At payout |
| Tax at 49.50% | €9,900 | €7,425 | €7,425 |
| Roughly left after tax | €10,100, held in shares | €7,575 gain, held in shares | €7,575 in cash |
The RSU looks best here only because the shares were free. A company would normally grant fewer RSUs than options for the same budget, because each RSU is worth a whole share. The option and the SAR produce the same gross gain, but the option holder ends up with shares, and has to find the cash for the tax unless the shares can be sold. The SAR holder gets cash, so paying the tax is easy, but owns nothing afterwards.
The proposed 2027 option rules in the Netherlands
The Dutch government has proposed a better regime for options at start-ups and scale-ups, the "Wet fiscale stimulering start-ups en scale-ups" (Kamerstuk 37024). It is a bill, not law: in October 2026 it was still before the Tweede Kamer, the intended start date is 1 January 2027, and the Raad van State was critical, so it may change (Taxlive; nader rapport, Ministry of Finance). If adopted as proposed:
- it covers options at companies with a start-up or scale-up decision (beschikking) from RVO;
- tax moves to the moment the employee sells the shares;
- only 65% of the gain is taxed, which the government puts at about 32% effective at the top rate;
- it applies to options granted on or after 17 April 2025, with a two-year lock-up from grant;
- employees with a substantial interest (aanmerkelijk belang) or a lucratief belang are excluded.
In the example above, the option holder would pay tax only on selling, on 65% of €15,000. That is €9,750 taxed at 49.50%, about €4,826 instead of €7,425. SARs and RSUs are not part of the proposal, which covers options only. Read more in our article on the 2027 option rules and the tax treatment of options.
Which one fits your company?
- For a listed company, or the European arm of a US group, RSUs are standard and employees can sell shares to pay the tax.
- A Dutch start-up or scale-up that wants employees to own part of the company usually picks options, often on depositary receipts through a STAK. If the 2027 bill passes, options also carry the lowest tax for qualifying companies.
- A company that wants to share growth but keep the shareholder register closed, or has staff in several countries, is better served by SARs, accepting that the payout is taxed as salary.
Many companies combine options and SARs, for example options for staff in the Netherlands and SARs for contractors abroad. See how that works on our Options + SAR page (in Dutch: opties en SAR's).
Frequently asked questions
What is the difference between an RSU and an ESOP?
An RSU gives the employee shares for free once they vest. An ESOP, in the European sense, gives the employee options: the right to buy shares later at a price fixed today. RSUs keep value if the share price drops; options are only worth something if it rises above the strike price.
What do RSU, ESOP and SAR stand for?
RSU stands for restricted stock unit, ESOP for employee stock ownership plan (in Europe often employee stock option plan), and SAR for stock appreciation right.
SAR vs RSU: which is better for employees?
An RSU is worth more per unit, because the employee receives the whole share and not only its growth. A SAR pays only the increase, but in cash, so there are no shares to sell. For a private company, SARs are far easier to run than RSUs.
ESOP vs SAR: what is the difference?
With an option plan the employee pays the strike price and ends up owning shares. With a SAR the employee pays nothing and receives the value increase, usually in cash, without becoming a shareholder. In the Netherlands both gains are taxed as salary today; only options are covered by the proposed 2027 relief.
How do VSOPs compare to RSUs?
A VSOP (virtual stock option plan) works like a SAR: the employee receives the value increase above a base price, without real shares. An RSU delivers real shares. Like a SAR, it needs no notary and leaves the shareholder register unchanged.
Set up options or SARs with Share Council
Share Council lets you set up and run options, SARs and depositary receipts from one platform, with vesting, documents and a cap table that stays up to date. See plans and start for free, or talk to Quintus about your plan.
About the author: Quintus Willemse is the founder and CEO of Share Council, the Dutch platform for employee ownership.
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