Monday, August 30, 2010

Restricted Stock Unit (RSU) Tax Reporting in Malaysia

If you work for the U.S. based company, you probably have heard about Restricted Stock Unit (RSU) but do you know what is the tax implication? If you're not interested in RSU, you can ignore this article...

Restricted stock unit (RSU) has been quite sometime with us as a replacement of stock option in many companies and suprisingly there are still many of us do not understand how how the tax reporting works for RSU. This article explains the RSU tax reporting in Malaysia and is applicable to rest of the countries as well since this is pretty general thing.

What is the difference between RSU and Stock Option?

A very funny statement I always heard from my colleage: "Wow! Why such a so big amount stated in my EA form?! I didn't even sell or excersise any of my stock!" Huh? Perhaps most people still do not understand the key difference between RSU and stock option:

  • Stock options are taxed at the time when your stocks are exercise or sold by you.
  • RSUs are taxed at the time when your stocks are vested or released to you by your employer (that's why you see such big amount in your EA form because your broker automatically sells your share to pay for the tax - see detail explanation below).
Notes: EA form is the form issued by an employer to tell how much earning of the employee and employee use this form to file for income tax annually.

What is the RSU taxable amount?

The RSU taxable amount is based on the total value of shares vested or released by your employer. For example, you're granted 400 RSUs in 2009 for 4 years to and only 100 RSUs will be vested in 2010 and the subsequent years. When the 100 RSUs are vested now at the closing price of $20, your total of RSU gain is $20 X 100 = $2000.

That means now $2000 is your taxable income.  Depends on your country tax law - In Malaysia, the Tax withholding rate is 26% (for year 2010) which means your total taxable withholding amount is $2000 X 26% = $520. Please keep in mind that this is just an estimated tax that your employer will deduct from your salary (based on the country tax withholding law).

The next thing is your brokerage (e.g. E-trade, Smith Barney and etc.) will sell enough shares to pay for this estimated tax. For example the next day, the closing price jumps to $21 and your brokerage sells 26 shares and the brokerage fee is $25. Therefore the total earning of this transaction is  $21 X 26 - $25  = $521. So now you use this money to pay for the tax withholding amount (i.e. $520) and the remaining $1 will be deposited to your account and shown in your EA form.

I know this could be confusing, so I try to summarize what happen here:
  • Total RSU Gain: 100 X $20 = $2000.  It is calculated based on the vested unit and closing price of the vested date.
  • Total tax withholding amount: $2000 X 26%= $520. Your employer calculates the estimated tax withholding for the vested RSUs based on the closing stock price.
  • Your broker sell enough shares: ($21 X 26 - $25 = $521) at the closing price of that day (i.e. $26) to cover the amount of tax withholding and $25 brokerage fees. This earning is used to pay the estimated tax withholding amount (i.e. %520) to the Income Tax Office.
  • The remaining money: ($521 - $520 = $1) will be deposited to your account and will be stated in your EA form.
Note: The closing prices is calculated based on the average of highest and lowest prices of that day. E.g. the highest price is $21 and the lowest prices is $19. Therefore, the closing price of that day is calculated as $20.

Note: The example may still subject to the currency exchange. E.g. You still need to convert the currency back to MYR. For simplicity, I just purposely ignore that...

Are you still confused? 

Some of you may still be confusing and the most frequent question that I heard is:
"Why tax me at MAX (i.e. 26%)? My tax bracket is not yet reach 26%!"
RSU Gain is the key! It really doesn't matter because the very MOST important thing here is NOT the tax BUT your RSU Gain. In this example, your RSU gain is $2K. It will be stated in your EA form. If your actual tax is less than 26%, that is perfectly okay because the tax withholding by your employer is just an ESTIMATION. This is nothing new. If your tax deduction is less than the actual, you pay back and otherwise you claim back your money.

Do you find this useful? Let me know if you have any questions to clarify.

Monday, August 16, 2010

Simple Way to Remove Gallstones Naturally - DIY

Do you realize health builds wealth? If no health, there will be no wealth. Perhaps you agree but you often neglect about it...

I came across this term in the past weeks that in fact our body has STONES!!! There are in fact 2 types of stones that we have in our body:

  1. Gallstone in our Gallbladder
  2. Kidney stone in our Kidney
I've heard of kidney stone but never heard of Gallstone. I learned about this from a friend who is currently pursuing his Chinese Traditional Doctor. These stones can be removed by surgery but there is a simple way to remove this stones by Do-It-Yourself (DIY) before they become too serious. I've tried the Gallstone removal DIY but not yet on the Kidney stone. So here is what I did and would like to share with you guys:


(1) Olive Oil - Go to any grocery store and look for one. Make sure you buy the "Extra Virgin" quality of the olive oil.

(2) 7 Lemons - You can buy more just in case not enough and you can buy either Green or Yellow. I personally buy both of them.

(3) 15 Apples - You can buy either Green or Red and I personally buy 2 of them. I heard some said Green apple is better. Well, it is up to you.
(3) 20g of Epsom Salt (Magnesium Sulfate) - You need to go to any pharmacy to purchase this. Not all the pharmacy have this, so you may want to search around. 

(4) Shaker - Buy the one has measurement with (i.e. ml) indicator. If no shaker is also okay, as long as something that you can measure with 10ml, 125ml and 250ml. 

(5) Fruit Juice Squeezer - This is optional but better to have one. If no, you can just use your hand to squeeze out the juice! :)

Steps (8 Days)

1st - 4th days: 
  1. Eat as usual and try to eat less meat. 
  2. Please make sure you eat until 70% full will be enough.
5th - 6th day:
  1.  Squeeze 1 lemon and pour the juice into 1 liter of water. Make sure you finish this 1 liter of water within a day and you can spread it out the whole day.
  2. Eat at least 4-5 apples per day. I mixed both red and green apple.
  3. Eat only plain porridge only for your 3 meals. It can be rice (Chinese), oat, and wheat porridge. Avoid taking oily and salty food. Plain porridge, remember? Don't add anything in the porridge to make it tasty...
7th day (fall on Friday or Saturday):
  1. Repeat the same thing for 5th and 6th day. 
  2. 1 PM - Completely stop eating anything after 1 PM. You can still drink but no food at all including the apple. That means you have to finish eating 4-5 apples in the morning. You still can drink water after 1 pm. However, please make sure you finish drinking the l liter water of lemon juice by 6 PM.
  3. 6PM - Mix 10g of Epsom salt with 250 ml water. Drink it! :) It is better you make sure you stay at home while drinking this because you might want to go toilet every often. This depends on the person as this is vary from one to another.
  4. 8PM - Mix 10g of Epsom salt with 250 ml water and drink it!
  5. 10 PM - Squeeze out the lemon juice and mix with 125ml of lemon juice with 125ml of olive oil (total is 250 ml). This may taste disgusting but it is still okay for me because I really like the lemon juice. After you drink, you should go to sleep directly. Good luck!
Notes: For your information, lemon and apple is used to soften the gallstone so that it is easier to come out. Eating porridge and not eating the last day after 1pm is to make sure your colon is empty and won't block the gallstone from coming out. Drinking Epsom salt water is to force your feces to come out so that there is no blocking the path. Finally the olive oil and lemon juice is to force your gallstone to come out. Hope this explains a bit...

8th day (fall on Sunday if you work on Saturday)
  1. This is the day you're releasing your gallstone from your body. Please make sure you stay at home and don't go anywhere. If you want to collect your feces as a proof in order to see the stones by yourself, you can do that too. Good luck!
Important: If you work on Saturday, please make sure your 5th day is on Thursday so that your 7th day is fall on Saturday. If you're not working on Saturday, you can choose your 5th day is Wednesday. The reason is that you need to stay at home for the 7th and 8th day and you will need the toilet a lot. (Again, this depends on person. For myself, I don't need the toilet that often - just one time in the morning)


I borrow a net (made by metal) from a friend and use this net to collect my feces during the 8th day. After that, I wash it and wow I really can see the stones! Here you go:

The biggest stone I have is around 6-7 mm. I read it somewhere that 8 mm is considered as serious. I tried to break it and the color is actually green inside the gallstone which I believe is due to the cholesterol based on the description I read on wikipedia.

Do you want to collect your own feces? This is really up to you. I want to try it is because I want to prove this method is really working and see something really come out from my body. I probably won't do it the next time as it is really troublesome. By the way, please don't do this too often as the Epsom salt is something that bad for your stomach. By right, you should continue to do this after 3 months until no more stones are coming out from your body. Well, I hope this is something worth sharing about our health and I will research more on the Kidney stone removal DIY next...

P/S: I've been sharing this to a lot of people (including my friends, my colleague, my family) and most of them are really interested. Perhaps it is cheap or free? There're few programs out there (could be direct-selling) which require you to buy their products for this Gallstones removal. However, I don't think you need to buy their products because all you can Do-It-Yourself naturally. Good luck!

Detail of gallstone in wikipedia: Gallstone

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