RSU Tax Calculator
Estimate the real federal tax on your vesting restricted stock units and see how the 22% supplemental withholding rate stacks up against your actual marginal rate.
RSU Tax Calculator
RSU Vesting Event
Other Income
Counts toward the $1M supplemental rate and Medicare surtax thresholds.
Filing Status
State Tax (Optional)
Federal estimate using 2026 brackets and the marginal (incremental) method. Ignores 401(k) and other pre-tax deferrals, AMT, credits, and NIIT. State tax is a flat-rate approximation. For a full federal return, download Tax47.
See Your Whole Tax Picture
This tool focuses on the federal tax from a single RSU vest. Tax47 pulls together your full return from W-2, 1099, and Schedule C data, then updates the estimated refund as you go.
How RSUs Are Taxed at Vesting
A Restricted Stock Unit becomes taxable on the day it vests. The taxable amount is the fair market value of the shares on that date: the number of shares that vested times the closing share price. The IRS treats this as ordinary wage income, so it lands in Box 1 of your W-2 right alongside your salary.
Because it counts as wages, FICA applies too. Social Security tax is withheld up to the annual wage base, and the 1.45% Medicare tax applies with no cap. High earners also pay the 0.9% Additional Medicare Tax on wages above their filing-status threshold. The vesting value becomes your cost basis as well, which matters later when you sell the shares.
The 22% Withholding Trap
RSU vesting income is a supplemental wage, and the IRS lets employers withhold federal income tax on supplemental wages at a flat 22%. That works fine when 22% is close to your real bracket. It does not work when your salary already puts you in the 24%, 32%, 35%, or 37% bracket, because the RSU dollars stack on top and get taxed at those higher rates.
Take a Single filer earning $200,000 in salary who vests $100,000 of RSUs. Most of those RSU dollars fall in the 32% bracket, yet only 22% was withheld. That is roughly a 10 percentage point gap, or about $10,000 owed at filing. Once cumulative supplemental wages pass $1,000,000 in a year, the portion above that line is withheld at 37%, which closes the gap for top-bracket income but leaves the dollars below $1,000,000 still under-withheld.
Closing the Withholding Gap
If the calculator shows a positive gap, you have a few ways to cover it. The cleanest is a Q4 estimated payment using Form 1040-ES or IRS Direct Pay, sized to the shortfall. You can also adjust your W-4 to request extra withholding from later paychecks, or sell a portion of the vested shares to raise the cash.
To avoid an underpayment penalty, try to meet a safe harbor: pay at least 90% of this year's total tax, or 100% of last year's tax (110% if your prior-year adjusted gross income topped $150,000). Acting before the January 15 estimated-payment deadline keeps the penalty from piling up.
Marginal vs. Effective Rate on Equity Comp
Your marginal rate is the bracket your last dollar reaches. This calculator uses the marginal, or incremental, method: it works out your federal tax with the RSUs included, then subtracts the tax without them. The difference is the true cost of the RSUs, taxed at the rates stacked on top of your base income.
The effective rate on RSU income is that incremental tax divided by the RSU income itself. Since a large vest can span more than one bracket, the effective rate usually sits between two bracket rates. Looking at both numbers shows why the flat 22% withholding rarely matches reality, and how much to set aside before you file.
Frequently Asked Questions
Common questions about rsu tax calculator
How are RSUs taxed when they vest?
Restricted Stock Units are taxed as ordinary income on the day they vest. The taxable amount is the number of shares that vested times the fair market value per share that day. This income shows up in Box 1 of your W-2, and Social Security and Medicare taxes apply too, since the IRS treats it as wages.
Why does my employer only withhold 22% on my RSUs?
RSU vesting income counts as supplemental wages, and the IRS lets employers withhold federal income tax on supplemental wages at a flat 22% (it jumps to 37% on the portion above $1,000,000 in a year). If your salary plus RSUs puts you in the 24%, 32%, 35%, or 37% bracket, that flat 22% sits below your real marginal rate, so it under-withholds.
What is the RSU withholding gap and why do I owe money at tax time?
The withholding gap is the difference between the federal tax actually due on your RSU income and what your employer withheld at the 22% supplemental rate. If your marginal rate is above 22%, the gap is positive and you owe the shortfall when you file, either through a Q4 estimated payment or with your return.
What happens to RSU withholding if my vests exceed $1 million in a year?
Once your cumulative supplemental wages pass $1,000,000 in a calendar year, the portion above that threshold is withheld at 37% instead of 22%. The dollars below $1,000,000 stay at 22%. This calculator counts RSU income you have already vested this year toward the $1,000,000 line.
How can I avoid an underpayment penalty on my RSUs?
Make a Q4 estimated payment using Form 1040-ES or IRS Direct Pay to cover the gap, increase your W-4 withholding, or sell some vested shares to fund the tax. Meeting a safe harbor (paying at least 90% of this year's tax, or 100% to 110% of last year's depending on income) generally avoids the penalty.
What's the difference between my marginal tax rate and effective tax rate on RSUs?
Your marginal rate is the bracket your last dollar of income reaches. Your effective rate on RSUs is the federal tax on the RSU income divided by the RSU income itself. Since RSU income stacks on top of your salary, it can span more than one bracket, so the effective rate often lands somewhere between two bracket rates.
Do I pay Social Security and Medicare tax on RSUs?
Yes. RSU vesting income is wages, so Social Security tax (up to the annual wage base) and the 1.45% Medicare tax apply. An extra 0.9% Additional Medicare Tax applies to wages above $200,000 for Single filers, $250,000 for Married Filing Jointly, and $125,000 for Married Filing Separately.
Do RSUs get taxed again when I sell the shares?
The vesting income is taxed once as wages. When you later sell the shares, only the gain or loss since vesting is taxed as a capital gain or loss, using the vest-date value as your cost basis. Because the vest itself is wage income, the Net Investment Income Tax does not apply to it, though it can apply to later investment gains.