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RSU Tax Calculator

Tax on your RSU vest, how many shares sell-to-cover takes, and how much more you will owe in April than the 22% your employer withheld.

Updated · By Niraj Kumar · 1 source

You

Filing statusFiling status
$
$

Withheld as supplemental wages before any equity.

$
%
0%15%

A flat rate on the extra income. Use 0 for Texas, Washington or Florida. California's top rates run 9.3–13.3% and it has its own AMT, which is not modelled.

Your company's stock

$

For a private company, the latest 409A value.

RSUs vesting this year

shares

Your RSU grant

shares
years
1 yr10 yrs
months
None24 mo
Vests everyVests every
%
−50%+100%

Concentration

shares
$

Cash, funds, retirement accounts and home equity.

Still to pay at filing$2,210on top of $11,740 withheld from the vest
Equity income
$40,000
RSU value plus option spreads
Federal income tax
$11,010
Social Security & Medicare
$940
State
$2,000
Extra tax this year
$13,950
34.9% of your equity income
Withheld by your employer
− $11,740
Left to pay
$2,210
Raise W-4 withholding or pay estimated tax to avoid an underpayment penalty
Your bracket32%
  • Federal income tax79%
  • Social Security & Medicare7%
  • State14%

Sell-to-cover on your RSU vest

Vest value
$40,000
1,000 shares
Withholding rate
29.3%
Supplemental federal, Social Security, Medicare and state
Shares sold to cover
294 shares
$11,740 withheld
Shares you keep
706 shares
Tax the vest actually adds
$13,950
Under-withheld
$2,210
Your bracket is 32%, but federal withholding is a flat 22%

Your grant, year by year

Value of each year's vestsAfter taxTax
$0$20 K$40 K$60 K1234
Vesting schedule with tax
Grant yearSharesAvg priceValueTaxAfter tax
11,200$40.00$48,000$17,098$30,902
21,200$40.00$48,000$17,098$30,902
31,200$40.00$48,000$17,098$30,902
41,200$40.00$48,000$17,098$30,902

Each year's tax assumes the same salary and bonus as above and 2026 brackets.

Concentration risk

After this year you would hold 706 shares, worth $28,240: 10% of your net worth. That is within the 10–20% many planners suggest as a ceiling for a single stock.

What a fall in the share price would do
Share priceYour sharesShare of net worth
$40.00 today$28,24010%
$30.00 (−25%)$21,1808%
$20.00 (−50%)$14,1205%
$10.00 (−75%)$7,0603%

How the RSU Tax Calculator works

AMT = max(0, TMT − regular tax), TMT = 26%/28% × (AGI + ISO spread − exemption)

This page uses the same method as the Stock Option & RSU Tax Calculator, which explains each term and assumption in full.

Worked example

A single filer on a $300,000 salary with 1,000 RSUs vesting at $150, in a state with no income tax.

  1. 1The vest is $150,000 of wages
  2. 2The broker withholds 22% federal plus Medicare: $36,525, selling 244 shares to cover it
  3. 3The vest actually adds $56,025 of tax, because it lands in the 35% bracket

About $19,500 is left to pay when you file, on top of what was withheld.

Frequently asked questions

How does sell-to-cover work?

On the vest date the broker sells enough whole shares to pay the tax your employer must withhold: federal at 22% (37% above $1M of supplemental wages in the year), Social Security up to the wage base, Medicare, and state. You keep the rest. Rounding up to whole shares usually leaves a few dollars over, which comes back through payroll.

Are RSUs taxed twice?

No. The vest is taxed as wages, and that value becomes your cost basis. When you sell, only the change since vesting is taxed, as a capital gain or loss. Shares sold within a year are short-term, at ordinary rates. Held longer, the gain is taxed at 0, 15 or 20%, plus 3.8% NIIT above $200,000 ($250,000 joint).

Should I sell my RSUs as soon as they vest?

Holding vested RSUs is the same decision as buying your employer's stock with the cash. Selling at vest has almost no tax cost, because the gain since vesting is tiny. Many advisers suggest selling unless you would buy the same shares with a cash bonus.

Sources

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