RSU Tax
Calculator
RSUs are taxed as ordinary income the moment they vest — and your employer's flat 22% withholding is often less than you actually owe. Estimate the real tax on a vest, the withholding shortfall, and what you'll likely owe at tax time. Updated for 2026, nothing saved.
Estimated tax on this vest
$17,033
on a $50,000 vest · 34.1% effective · 32% marginal
Your employer withholds a flat 22% ($11,000), but your marginal rate means about $15,858 in federal income tax is really due — roughly $4,858 could still be owed at tax time.
- Federal income tax
- $15,858
- FICA (Social Security + Medicare)
- $1,175
- After-tax value
- $32,967
State tax not included — your state isn't in the estimate set, or you skipped it. Most states tax the vest as ordinary wages.
Basis · 2026 IRS ordinary brackets (Rev. Proc. 2025-32) · 22%/37% supplemental withholding · FICA (Social Security wage base est.) · state via an effective-rate proxy · an educational estimate, NOT tax advice.
The short answer
When RSUs vest, their full market value is taxed as ordinary (W-2) income at your marginal rate — up to 37% federally in 2026 — plus Social Security and Medicare, and state tax. Employers typically withhold a flat 22% for federal tax; if your marginal rate is higher, the shortfall becomes a bill or estimated payment at tax time. RSUs are taxed at vesting whether or not you sell.
Common questions
How are RSUs taxed?
At vesting, the fair market value of the shares is ordinary income on your W-2, taxed at your marginal rate plus Social Security and Medicare. When you later sell, any change in value from the vest-date price is a capital gain or loss.
Why do I owe more tax on RSUs than was withheld?
Employers usually withhold a flat 22% federal supplemental rate. If your marginal rate is 32% or 37%, that under-withholds — and the difference shows up as a balance due (or required estimated payment) at tax time.
What is the 22% RSU withholding?
22% is the IRS flat withholding rate on supplemental wages (which include RSUs) up to $1 million per year; amounts above $1 million are withheld at 37%. It's a withholding default, not your actual tax.
Are RSUs taxed twice?
No — but there are two separate events: ordinary income tax at vest on the full value, then capital gains tax only on any gain between the vest price and your eventual sale price. Selling right at vest usually means little or no additional gain.
How do I lower the tax hit?
You can't avoid ordinary tax at vest, but you can plan for it: set aside the withholding gap, make estimated payments, and manage the capital-gains timing on shares you hold. Formation tracks vests, the withholding gap, and concentration across every account.
One place for every number, cited.
A calculator answers one question. Formation tracks the whole picture — net worth, equity comp, and taxes across every custodian and entity, each number traceable to its source.