RSU Tax Calculator
See the real after-tax value of your vesting RSUs — and whether the standard 22% withholding leaves you owing more at tax time.
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.