Key Takeaways ✅ Leaving a job can turn a ten-year share option into a 90-day decision, because post-termination windows are often very short ✅ Unvested options usually lapse when you leave, while vested options must typically be exercised within the shortened window or they die ✅ Redundancy, retirement and ill health may qualify for better good leaver treatment, but only your plan rules decide that ✅ Even after you’ve left, your former employer still runs the payroll tax on any exercise, and you may need to provide the cash ✅ Check your vesting, deadlines and cash requirement before you resign or sign anything, not after

Leaving a job is a big moment on its own. Leaving a job with share options attached turns it into a financial decision as well, and often an urgent one. Here at Money Maximising Advisors Limited, we meet this situation regularly. Someone has spent years building up options, then a new job offer arrives, or a redundancy letter lands, and a decision they expected to make sometime in the next decade suddenly has to be made in weeks. The rules are buried in plan documents most people have never read, and the deadlines are unforgiving. So let’s go through exactly what happens to your options when employment ends, while there’s still time to act.

Vested versus unvested: the distinction that decides everything

Options usually vest in stages over several years. Vested means you’ve met the time or performance conditions attached to that portion of your award. It does not mean you own the shares. This matters enormously when you leave, because plans almost always treat the two categories very differently, and the difference can be worth a life-changing amount of money.

What typically happens on resignation

On a voluntary resignation, unvested options usually lapse immediately. Gone, with no compensation. Vested options normally survive, but only for a short post-termination window, often around 90 days, even if the original expiry date was years away. Miss that window and the value disappears entirely. People have lost six-figure sums simply because nobody told them the clock had started. If you’re weighing up a move, count your vested and unvested options, check the spread between the exercise price and today’s value, and confirm the shortened deadline before you hand in your notice, because any equity you’re walking away from is a number your new employer should hear about. Buyout awards and sign-on payments that replace forfeited equity are a completely normal part of job negotiations, but only for people who arrive with the figures.

Redundancy and good leaver treatment

Some plans treat redundancy, retirement, ill health, disability or death as good leaver events. A good leaver might keep vested options for longer, receive accelerated or pro-rated vesting on unvested awards, or continue vesting for a limited period. But here’s the honest truth. There’s no universal entitlement to any of this. Your plan rules and, in some cases, employer discretion decide the outcome, and the gap between ordinary and good leaver treatment can be worth a great deal.

If you’re negotiating an exit package, your equity deserves a seat at the table alongside notice pay, statutory redundancy and any ex-gratia payment. And since redundancy brings its own entitlements and tax reliefs, it’s worth reading our full guide to redundancy payment entitlements in Ireland alongside this one. One warning while we’re here. A payment for surrendering or releasing your options is generally taxed through payroll like income. Don’t assume it gets the kinder treatment of a redundancy lump sum, because Revenue doesn’t see them as the same thing at all.

A worked example of the leaver maths

A quick worked example shows what’s at stake. Imagine you hold 8,000 vested options at a €15 exercise price with the shares trading at €40, plus another 4,000 options vesting next year. The vested portion carries a spread of €200,000. If your plan gives ordinary leavers 90 days and lets the unvested 4,000 lapse, resigning today means finding the cash and making the exercise decision inside three months, and writing off whatever the unvested tranche might have become. If redundancy under the same plan brings twelve months to exercise and pro-rated vesting of half the unvested awards, the same departure looks completely different. Same person, same shares, wildly different outcome, all decided by paperwork most people have never opened. That’s why the plan rules should always be read in full before any decision is made.

The tax doesn’t leave when you do

A common misunderstanding is that once you’ve left, the tax somehow becomes your new employer’s problem, or nobody’s. Neither is true. If you exercise vested options after leaving, within whatever window applies, your former employer still reports the gain and remits the Income Tax, USC and PRSI through payroll. Revenue treats it as a post-cessation payment connected to your old employment, and your new employer doesn’t inherit any part of that responsibility just because you’ve changed jobs. The practical snag is that you have no salary there anymore for the tax to come out of, so the funding method, whether that’s your own cash, a sale of shares or share withholding, needs to be agreed with the plan administrator before you exercise, not after. Your former employer must remit the tax even where it can’t recover it from you at the time, and Revenue expects you to make good any amount the employer funds, so nobody wins when this is left vague.

Not everything in your package is an option

One more clarification that saves confusion. Share options are not the only equity award out there, and the rules differ between types. Restricted stock units, or RSUs, deliver shares automatically when they vest, with tax arising at that point rather than on any exercise, because there’s nothing to exercise. Approved profit sharing shares and SAYE schemes follow their own paths again. When you’re leaving a job, each award type in your package needs to be checked against its own plan rules, because a departure that treats your options kindly might treat your RSUs harshly, or the other way around. List everything you hold, award by award, and get the leaver treatment for each confirmed separately. It’s tedious for an afternoon and valuable for a lifetime.

What about shares you already own?

If you exercised while employed, you’re simply a shareholder now, and leaving doesn’t normally force you to sell unless a shareholder agreement or scheme restriction says otherwise. But it’s a natural moment to ask a harder question. Does holding a large block of your former employer’s shares still make sense? Your salary no longer depends on the company, which helps, but familiarity is not an investment strategy. A good test is this. If someone handed you the same amount in cash today, would you buy those shares with it? If the answer is no, it’s time to look at diversifying, and our savings and investments team can help you do that sensibly. Any sale may bring CGT at 33% on growth since exercise, with your €1,270 annual exemption available against it, so plan the timing rather than rushing it.

Moving abroad? Add another layer

Plenty of departures involve a flight as well as a P45, and cross-border cases genuinely are more complicated. An option might have been granted in Ireland, vested while you worked in two countries, and be exercised after you’ve left both the employer and the State. Residence, where the employment duties were actually performed, double tax agreements and the foreign country’s own rules can all shape the final bill, and moving country does not automatically remove Irish tax exposure. If the values are material, take advice before you exercise, before you leave, or ideally before both. Untangling it afterwards is always harder and sometimes impossible.

Retiring rather than resigning?

Retirement deserves its own mention, because it’s the one departure everybody eventually makes. Many plans treat retirement as a good leaver event with extended exercise windows, and some allow vesting to continue for a period after you finish up. The payroll position stays the same as any other departure, meaning your former employer reports and remits the tax on a post-retirement exercise, and the funding conversation matters even more when there’s a pension rather than a salary coming in. If retirement is on your horizon, fold your options into the wider retirement plan early, because the timing of an exercise can interact with your other income in ways that change the tax result. These overlaps are exactly where proper retirement planning advice earns its keep.

Get it all in writing before you sign

Before your employment ends, there’s a short list of answers you want on paper rather than in a corridor conversation. How many options are vested and how many aren’t. Whether redundancy or retirement triggers any acceleration or extension under the plan. The exact post-termination exercise date, not roughly 90 days but the actual date. How payroll will operate on an exercise after departure and how the tax will be funded. Whether dealing windows, insider rules or a shareholder agreement could block a sale when you need one. And whether the severance agreement confirms, changes or quietly waives any of your equity rights, because we have seen all three. An hour spent collecting these answers before signing protects value that no amount of effort can recover afterwards.

Frequently Asked Questions

What happens to my unvested share options if I resign?

In most plans they lapse immediately with no compensation. Some plans make exceptions for good leaver events like redundancy or retirement, so check your rules before handing in notice.

How long do I have to exercise vested options after leaving?

It depends entirely on your plan, but post-termination windows of around 90 days are common, even where the original expiry was years away. Get your deadline confirmed in writing as soon as you know you’re leaving.

Does redundancy give me better treatment on my options?

Possibly. Many plans treat redundancy as a good leaver event with longer windows or accelerated vesting, but there’s no automatic entitlement. The plan rules and any employer discretion decide it.

Who deducts the tax if I exercise after leaving?

Your former employer still reports the gain and remits the payroll taxes as a post-cessation payment. You may need to provide the cash or authorise a share sale, since there’s no salary left to absorb the deduction.

Should I mention my share options when negotiating a new job?

Absolutely. If moving means walking away from unvested equity, put a number on what you’re losing and raise it. Buyout awards and sign-on payments to replace forfeited equity are a normal part of negotiations.

Does moving abroad remove the Irish tax on my options?

Not automatically. Irish exposure depends on where the duties connected to the option were performed, your residence position and any double tax agreement. Cross-border cases need specific advice before you exercise or move.

Final Thoughts

Share options reward patience right up until the day you leave, when they suddenly demand speed. The pattern to remember is simple. Unvested awards usually die, vested awards get a short window, redundancy might earn you better treatment, and the tax follows you out the door with your old employer still running the payroll. Every one of those points is manageable if you look at it before you resign or sign, and that’s precisely where we come in. Redundancy and employment transitions are among our specialities, and we’ve guided people through these exact decisions for over 30 years. If change is coming at work, whether you’re choosing it or it’s choosing you, book a free consultation before anything is signed. It costs nothing, and it might save you a deadline you didn’t know existed.

_{Money Maximising Advisors Limited is regulated by the Central Bank of Ireland (C154250). This article is for information purposes only and does not constitute financial or tax advice.}