RSU Tax Calculator
By Baolin Gong, AFP · Founder, USFinCalc · Reviewed against primary sources (IRS, SSA, state revenue authorities).
RSUs are taxed as ordinary income when they vest, based on the share price on the vesting date. Employers usually withhold a flat 22% for federal tax, but if your marginal rate is higher — 32% or 37% for many tech employees — that withholding falls short and you owe the difference at tax time. This calculator shows your real after-tax value and any shortfall.
See the real after-tax value of your vesting RSUs — and whether the standard 22% withholding leaves you owing more at tax time.
After-tax value of your RSUs
Your gross RSU value split into what you keep and each tax — federal income tax at your marginal rate, Social Security, Medicare, and state tax. The green slice is the after-tax value.
How RSU taxes really work
When your restricted stock units vest, the IRS treats their full market value as ordinary income — exactly like a cash bonus. That income is taxed at your federal marginal rate, hit with Social Security and Medicare, and taxed again by most states. This calculator stacks your RSU income on top of your base salary to find the real marginal rate, then compares it to what your employer actually withholds.
Here is the part that catches people off guard. Employers withhold federal tax on RSU income at the 22% supplemental flat rate (37% on amounts over $1 million). If your salary already puts you in the 32% or 35% bracket — common for software engineers at large tech companies — then 22% is far too little. The shortfall doesn't disappear; it shows up as a balance due when you file.
The 22% under-withholding trap
Say you earn a $300,000 base salary and $100,000 of RSUs vest. Your employer withholds $22,000 in federal tax (22%). But because that $100,000 stacks on top of your salary, it is taxed at 35% — about $35,000. The $13,000 difference is what you'll owe at filing. Multiply that across several vesting events and the surprise can be severe.
The fix is simple once you see the number: set aside the gap this calculator shows, increase your W-4 withholding, or make quarterly estimated payments. Knowing the figure in advance is the whole point.
RSUs, FICA, and state tax
RSU income is wages, so payroll taxes apply. Social Security (6.2%) only applies up to the annual wage base — if your salary already exceeds it, your RSUs owe no additional Social Security. Medicare (1.45%) applies to every dollar, and high earners pay an extra 0.9% above $200,000 (single) or $250,000 (married). State income tax depends on where you live; in no-income-tax states like Washington and Texas, your RSUs escape state tax entirely, which is a meaningful advantage for tech workers there.
Once you know your after-tax RSU value, the smart move is to put it to work. See how it fits your paycheck with our take-home pay calculator, or turn it into long-term growth with our retirement calculator. Equity compensation is complex — confirm your specific situation with a CPA.
Worked example: the same $100,000 vest at four salary levels
The size of the withholding gap depends almost entirely on your base salary, because salary determines which bracket the RSU income stacks into. The table below shows a single filer with a $100,000 RSU vest (2026 brackets, standard deduction applied) at four base-salary levels — federal income tax only, before FICA and state tax:
| Base salary | Federal tax on the $100k vest | Effective rate on RSUs | 22% withheld | Shortfall at filing |
|---|---|---|---|---|
| $120,000 | $24,134 | 24.1% | $22,000 | $2,134 |
| $180,000 | $29,200 | 29.2% | $22,000 | $7,200 |
| $250,000 | $34,330 | 34.3% | $22,000 | $12,330 |
| $300,000 | $35,000 | 35.0% | $22,000 | $13,000 |
At a $120,000 salary the gap is a manageable $2,134 — annoying, not dangerous. At $250,000 and above it exceeds $12,000 per vest event. An engineer with quarterly vesting at that level who spends each vest as it lands can arrive at tax season owing $45,000+ with nothing set aside. If the shortfall is large enough, the IRS may also add an underpayment penalty — the safe-harbor rule (paying at least 110% of last year's total tax through withholding or estimated payments, for higher earners) is the usual way to stay clear of it.
A second decision hides inside every vest: what to do with the shares. Selling immediately owes no additional tax beyond what the table shows — the shares' cost basis equals the vest-day price, so there's no gain yet. Holding them instead means any future movement is capital gains or losses on top of the ordinary income you already recognized. If you do hold and later sell, our capital gains calculator shows the long-term versus short-term difference; the one-year clock starts at vest, not at grant.
Holding also concentrates two risks in one employer: your salary and a growing share of your net worth both depend on the same company's health. There is no tax penalty for selling at vest — the common instinct that "selling right away wastes the grant" has it backwards, since the income tax is owed either way. Many advisors treat vested RSUs exactly like a cash bonus: would you spend this month's bonus buying your employer's stock? If not, the default of selling at vest and diversifying is the consistent answer. Whatever you choose, decide it as a policy in advance rather than vest by vest — that removes the temptation to time the stock.