RSU Tax Calculator
Calculate taxes and withholding gaps on RSU vesting
Disclaimer
This calculator is for educational and projection purposes only. Calculations use general assumptions based on 2026 federal tax rates and may not reflect your exact tax situation. Results should be verified with a qualified tax professional or CPA before making any financial decisions.
Input Parameters
Enter your RSU vesting details
Most employers withhold at 22%. Supplemental wage withholding for amounts over $1M is 37%.
Tax Calculation Results
Based on 2026 federal tax rates
Taxable Income from RSU Vest
Shares × FMV, treated as ordinary income
Withholding Gap (You Owe More)
Set aside this amount for estimated tax payments to avoid underpayment penalties.
Effective Tax Rate on RSU Vest
How RSU Taxes Work in 2026
Restricted Stock Units (RSUs) are taxed as ordinary income when they vest. The taxable amount is the number of shares vesting multiplied by the fair market value (FMV) on the vest date. This income is subject to federal income tax, FICA (Social Security and Medicare), and state income tax.
Most employers withhold taxes at the 22% federal supplemental wage rate. However, your actual marginal tax rate may be 32%, 35%, or even 37% — creating a withholding gap. For supplemental wages over $1 million in a calendar year, the withholding rate is 37%.
After vesting, if you continue to hold the shares, your cost basis is the FMV at vest. If the stock price goes up and you sell after holding for more than one year, the gain is taxed at long-term capital gains rates. If you sell within one year of vesting, it's a short-term capital gain taxed at ordinary rates.
Frequently Asked Questions
What is the RSU withholding gap?
The withholding gap is the difference between the tax your employer actually withholds (typically 22%) and your true marginal tax rate. If you're in the 35% bracket, your employer under-withholds by 13% on every vest. This gap compounds throughout the year and results in a tax bill at filing time.
How are RSUs different from stock options?
RSUs always have value when they vest (shares are delivered at current FMV). Stock options require paying the strike price and only have value if FMV exceeds the strike price. RSUs are taxed at vest; options are taxed at exercise. RSUs are simpler but offer less flexibility in tax timing.
Should I sell RSUs immediately or hold them?
This depends on your financial situation, tax bracket, and views on your company's stock. Selling immediately locks in the value and avoids concentration risk. Holding for over a year may qualify gains for lower long-term capital gains rates, but you bear the risk of the stock declining. Consult with a financial advisor for personalized guidance.
What are the 2026 supplemental wage withholding rates?
For 2026, the federal supplemental wage withholding rate is 22% for supplemental wages up to $1 million. For supplemental wages exceeding $1 million in a calendar year, the withholding rate is 37%. RSU vests are classified as supplemental wages. Source: IRS Publication 15-T.
Need Expert Guidance?
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