I have similar sweat equity in my tech company, and have to pay income tax rates and payroll taxes on my earnings.
No, you have to pay income tax rates and payroll taxes on your salary. Sweat equity is taxed at capital gains rates, much like the sweat equity of hedge fund managers.
(Except for the various special cases when it is not. I've only gotten equity at the stage of founding the company, I'm told it's taxed differently if you get it as part of your comp package when you work at google.)
No, you have to pay income tax rates and payroll taxes on your salary. Sweat equity is taxed at capital gains rates, much like the sweat equity of hedge fund managers.
(Except for the various special cases when it is not. I've only gotten equity at the stage of founding the company, I'm told it's taxed differently if you get it as part of your comp package when you work at google.)