RSU Tax Calculator (Restricted Stock Unit Vesting)

Restricted stock units, almost always shortened to RSUs, are the most common form of equity compensation at established technology and public companies today. An RSU has no strike price and no exercise decision to make, unlike stock options. You are simply granted units that convert into actual shares on a vesting schedule, and the moment they vest, the full value of those shares is treated as ordinary compensation income, exactly as if your employer had paid you a cash bonus and you chose to buy company stock with it.

This creates two distinct calculations that matter to every RSU holder. The first is the actual tax you owe, income tax plus payroll tax, on the value of the shares as they vest. The second, the one that catches far more people off guard, is how much your employer actually withheld on your behalf at that moment. The IRS lets employers use a flat withholding rate on supplemental wages like RSU vesting income rather than calculating your true marginal rate, and for a lot of employees, especially those already in a 24% or higher bracket, that flat rate under-collects. The gap surfaces as a surprise balance due when they file their return the following spring.

The calculator separates what you actually owe from what your employer actually withheld, then shows you the gap.

Vesting income. Shares vesting multiplied by the fair market value per share on the vesting date. There's no strike price to subtract here: RSUs, unlike options, cost nothing to receive, so the entire value is compensation.

Actual ordinary income tax owed. The vesting income is stacked on top of your other W-2 wages for the year using the 2026 federal brackets, and the calculator computes the tax specifically attributable to the vesting income, meaning the tax on (other wages + vesting income) minus the tax on other wages alone. This correctly reflects that vesting income lands on top of your existing salary in the bracket structure, not at the bottom.

Actual FICA owed. Vesting income is W-2 wages, so it is subject to the same 6.2% Social Security tax (up to the annual wage base) and 1.45% Medicare tax as your salary, plus 0.9% Additional Medicare Tax once your combined wages for the year cross the filing-status threshold.

What your employer actually withholds. For supplemental wage payments like RSU vesting, employers generally use a flat statutory rate rather than your marginal rate: 22% on cumulative supplemental wages up to $1,000,000 for the year from that employer, and a mandatory 37% on any amount above $1,000,000. FICA withholding, by contrast, is not optional or approximate; it is calculated using the exact same statutory formula as the "actual" FICA figure above, so the two always match.

The gap. The calculator compares actual total tax due to total tax withheld and reports whether you are under-withheld, meaning you will owe additional tax (and possibly a penalty) when you file, or over-withheld, meaning some of what was withheld will come back as part of your refund.

Standard vest. You have 500 RSUs vesting at a $80 fair market value per share, with $150,000 in other W-2 wages already earned this year as a single filer. Vesting income is 500 × $80 = $40,000. Stacking that on your other wages, the entire amount falls inside the 24% bracket, producing $9,600 of actual ordinary tax. FICA on the $40,000 comes to $2,719 (Social Security capped by the remaining wage base, Medicare uncapped). Actual total tax due: $12,319. Your employer withholds at the flat 22% supplemental rate, which produces only $8,800 of federal withholding, plus the same $2,719 of FICA, for $11,519 total withheld. You are under-withheld by exactly $800, the gap between your true 24% marginal rate and the flat 22% withholding rate applied to the full $40,000.

Crossing the $1 million cliff. A senior employee vests 15,000 shares at $90 per share, a $1,350,000 vesting event, having already received $800,000 in supplemental wages (bonuses and prior vests) earlier in the year from the same employer. Only $200,000 remains before the $1,000,000 cliff, so that portion withholds at 22% and the remaining $1,150,000 withholds at 37%, for $469,500 of federal withholding, plus $31,725 of FICA, totaling $501,225 withheld. But this employee's true marginal rate on the entire $1,350,000 is the top 37% bracket, since their income was already well into it before this vest. Actual tax due comes to $531,225. They are under-withheld by exactly $30,000, precisely the $200,000 that was withheld at 22% instead of the 37% it should have been taxed at.

This calculator does not model state income tax, which many states withhold and tax separately, often using their own flat supplemental rate that can compound the same under-withholding problem at the state level. It does not model a sell-to-cover strategy in exact share terms; many employers automatically sell a number of shares sufficient to cover the withholding amount, and fractional share and rounding mechanics vary by broker and plan administrator. It does not account for RSU vesting schedules that span a single grant across many small vesting events throughout the year, each of which is its own separate taxable event; this calculator models one vesting event at a time. It does not model double-trigger RSUs common at pre-IPO companies, where vesting requires both the passage of time and a liquidity event, which can cause several years of vested-but-untaxed RSUs to become taxable all at once when a company finally goes public or is acquired. It does not calculate estimated tax payment requirements or underpayment penalties that can result from a large under-withheld vesting event occurring mid-year.

• Assuming the withheld amount equals the actual tax owed. The flat 22%/37% supplemental withholding rate is a payroll convenience, not a calculation of your real liability, and frequently under-withholds for anyone above the 22% ordinary bracket.
• Not setting aside cash for the gap. If shares are not automatically sold to cover taxes, or if the sell-to-cover only covers the flat withholding rate rather than your true marginal rate, you can be left needing to find cash from other sources at filing time.
• Confusing RSU taxation with stock option taxation. RSUs have no strike price and no exercise decision; the entire value at vesting is ordinary income, a simpler but often larger immediate tax event than an option exercise on the same dollar value of stock.
• Ignoring cumulative supplemental wages across the year. The 22%/37% cliff is based on cumulative supplemental wages from the same employer for the calendar year, not on any single vesting event in isolation, so a series of smaller vests can still cross the $1,000,000 threshold partway through the year.
• Forgetting that selling shares immediately after vesting still has a (usually small) capital gains consequence. Any price movement between the vesting-date FMV, which set your cost basis, and your actual sale price is a separate short-term capital gain or loss, even if you sell the same day.

• Internal Revenue Service, Publication 15 (Circular E), Employer's Tax Guide, Section 7, Supplemental Wages, https://www.irs.gov/publications/p15
• Internal Revenue Service, Revenue Procedure 2025-32 (2026 federal income tax brackets and standard deduction), https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
• Social Security Administration, 2026 COLA Fact Sheet (Social Security wage base and FICA rates), https://www.ssa.gov/news/press/factsheets/colafacts2026.pdf
• Internal Revenue Service, Topic No. 427, Stock Options and equity compensation guidance, https://www.irs.gov/taxtopics/tc427