Calculate your RSU tax withholding, net value after taxes, and remaining tax due at vesting
Quick Answer:RSUs are taxed as ordinary income at vesting. Expect 35-45% total tax withholding including federal, state, Social Security, and Medicare taxes. Your employer typically withholds shares to cover this obligation.
Net Value After Tax
Calculating... after all taxes
Gross RSU Value
$0
Total Tax Liability
$0
Tax Withholding Value
$0
Remaining Tax Due
$0
Shares After Withholding
Net Shares Value
The default federal supplemental withholding rate is 22%, but your actual marginal rate may be higher (up to 37%). If you are in a higher bracket, set aside additional funds or adjust your W-4 withholding to avoid an unexpected tax bill at filing time. Also remember that any gain after the vesting date is a separate capital gain or loss event when you eventually sell the shares.
RSUs are taxed as ordinary income when they vest. The full fair market value of the shares on the vesting date is added to your W-2 income and subject to federal income tax, state income tax, Social Security tax (up to the wage base), and Medicare tax. Your employer typically withholds shares to cover the tax obligation through a sell-to-cover arrangement.
Employers withhold shares (called sell-to-cover) to pay the required tax withholding on your RSU income. The default federal supplemental withholding rate is 22% (37% for amounts over $1 million). Combined with state and FICA taxes, many employees see 35-45% of their RSU shares withheld. The actual tax owed may differ from the withholding amount.
Possibly. The shares withheld at vesting are based on supplemental withholding rates, which may not match your actual marginal tax rate. If your actual tax bracket is higher than the withholding rate, you may owe additional taxes when you file your return. Use this calculator to estimate the gap between withholding and actual tax owed.