RSU Tax Calculator
When restricted stock units (RSUs) vest, their fair market value counts as ordinary income — and your employer withholds federal, Social Security, Medicare, and state taxes before you see a dollar. Enter your vesting details for a 2026 estimate of what gets withheld, your net proceeds, and how many shares you actually keep. Runs entirely in your browser.
Frequently Asked Questions
How are RSUs taxed when they vest?
At vesting, the fair market value of your RSU shares is taxed as ordinary income — just like a cash bonus. It is reported as supplemental wages on your W-2. Your employer withholds federal income tax, Social Security, Medicare, and state tax at vest, and any later gain or loss when you sell the shares is taxed separately as a capital gain or loss.
What is the federal withholding rate on RSUs in 2026?
For 2026, the IRS flat supplemental-wage withholding rate is 22% on the first $1 million of supplemental wages paid to you in the year, and a mandatory 37% on amounts above $1 million (IRS Publication 15). Remember: this is withholding, not your final tax — the RSU income is ultimately taxed at your actual marginal income tax rate when you file.
Do I pay Social Security tax on RSUs?
Yes. RSU income is subject to Social Security tax at 6.2% up to the 2026 wage base of $184,500, and Medicare tax at 1.45% with no cap. If your total 2026 wages from the employer exceed $184,500, the RSU portion above that line escapes Social Security tax. An additional 0.9% Medicare tax applies to wages above $200,000 (single), $250,000 (joint), or $125,000 (married filing separately).
What is net settlement vs. sell-to-cover?
Two common ways employers collect the withholding: net settlement, where the company keeps some of your vesting shares (you receive fewer shares, no cash changes hands), and sell-to-cover, where shares are sold on the market to raise the cash for taxes. The math is identical — the "net shares" figure above shows what net settlement leaves you with.
Is withholding the same as what I actually owe?
No. The 22% federal withholding is often lower than the marginal rate of high earners, which is why a big vest can leave you owing more at tax time — or, less commonly, due a refund. Use the estimate here to plan quarterly payments or adjust your W-4 so April brings no surprises.
How do RSUs differ from stock options for taxes?
RSUs are taxed once at vesting on the full share value, with no action required from you. Stock options are taxed when you exercise (NSOs) or when you sell under special holding rules (ISOs), and the timing is partly in your control. RSUs are simpler — but that also means the tax bill arrives on a schedule you did not choose.