As ordinary income at vesting. The full fair market value of the shares that vest is added to your wages that year and taxed like salary, with tax withheld. If you hold the shares and sell later, any additional gain or loss is a separate capital gain or loss on the change after vesting.

What is the RSU withholding gap?

Employers usually withhold federal income tax on RSU vest income at a flat supplemental rate of 22% (37% above $1 million of supplemental wages). If your marginal bracket is higher, the withholding falls short of your real tax. That shortfall is the withholding gap. This calculator estimates it so you can plan cash or share sales before vest day, not after a surprise bill.

Should I sell-to-cover or sell enough for my full tax?

Sell-to-cover typically sells only enough shares to fund the employer's withholding, not necessarily your full tax at your real bracket. Many people sell to cover automatically, then sell or set aside more for the gap between 22% and their actual rate, plus state tax if it applies. The calculator shows an estimated share count at the vesting price for the full modeled tax.

Do RSU vests affect estimated taxes during the year?

They can. Large vest income can push you into a higher bracket and raise what you owe for the year beyond paycheck withholding. If your company withholds only the supplemental rate, you may need larger quarterly estimated payments or extra cash at filing. Model the vest against the rest of your income before the tranche hits.

Are RSUs taxed twice?

No. You are taxed once as ordinary income at vesting, and that value becomes your cost basis. You are only taxed again on additional gain if the shares rise after vesting and you sell. Forgetting the basis is how people accidentally pay twice.

Does this calculator include state tax?

Yes, if you enter your state rate. RSU income is also usually subject to state income tax where you live and work. Set the state rate to 0% for a no-income-tax state. Estimates only; your actual return depends on residency, credits, and the rest of your return.

RSU tax calculator for the withholding gap

Estimate the federal, Medicare, and state tax on a restricted stock unit vesting, plus how far the 22% supplemental withholding falls short of what you may actually owe.

Estimate the tax on a vesting

Shares vesting

Share price at vesting$

Federal tax bracket

Your top marginal rate. RSU income stacks on top of your salary.

State income tax rate%

Set to 0% for a no-income-tax state.

Taxable income at vesting

$50,000

The full value of the vested shares is ordinary income, added to your W-2 that year.

Estimated total tax

$21,175

42.4% of the vesting (federal, Medicare, and state)

Take-home value

$28,825

What's left after estimated tax

Shares to cover tax

424

Sold at the vesting price to pay the estimated bill

Mind the withholding gap

Employers withhold federal tax on RSUs at a flat 22%, but your 35% bracket owes more. That leaves an estimated $6,500 in federal tax you may still owe at filing, before state tax. Setting that aside now avoids an April surprise.

Estimates only, not tax advice. Assumes RSU income stacks on salary at your chosen marginal rate, that your salary already clears the Social Security wage base, and a flat state rate. Your actual tax depends on your full return.

What to decide after you run the numbers

The calculator is a starting point. These are the decisions an RSU tax advisor usually models with you before vest day.

Model the withholding gap before vest day

The 22% (or 37%) supplemental rate is not your personal tax rate. Use the calculator to see the gap, then decide whether to hold cash, sell extra shares, or adjust estimates.
Separate sell-to-cover from your full tax plan

Automatic sell-to-cover funds withholding. Your real bill can still be higher. Plan the extra shares or cash against concentration and the rest of your year.
Stack the vest with salary, options, and crypto

One vest rarely sits alone. A flat-fee CPA and CFP can project how this tranche stacks with W-2 income, ISO/NSO moves, and other gains so April is not the first time someone runs the numbers.

Why RSU taxes surprise people

RSUs are taxed as ordinary income the moment they vest, on the full value of the shares, whether or not you sell. That part is simple. The surprise is the withholding: your employer withholds federal tax at a flat 22% (37% on supplemental wages above $1 million), and for a high earner whose real bracket is 32% to 37%, that is not enough. The difference lands as a bill at filing, or as higher estimated taxes if you catch it mid-year.

The fix is to know the gap in advance and set the cash aside, or sell a few more shares when they vest. For how that fits a full equity stack, see the RSU tax advisor page and the equity compensation advisor hub. For mechanics, read RSU tax withholding and RSUs vs stock options .

Ready for a human pass on your vesting calendar? Book a demo .

RSU tax calculator for the withholding gap

What to decide after you run the numbers

Model the withholding gap before vest day

Separate sell-to-cover from your full tax plan

Stack the vest with salary, options, and crypto

Why RSU taxes surprise people

Frequently asked questions

How are RSUs taxed?+

What is the RSU withholding gap?+

Should I sell-to-cover or sell enough for my full tax?+

Do RSU vests affect estimated taxes during the year?+

Are RSUs taxed twice?+

Does this calculator include state tax?+