Your RSUs Are Vesting.
Here Is What You Actually Owe.

How to use this calculator

When RSUs vest, the IRS treats the full value of the shares on that day as ordinary income, taxed the same as your salary. Your employer withholds taxes, but the standard withholding rate is a flat 22%, which is often far below your actual marginal rate. This calculator estimates your total tax liability at vesting and shows you the gap.

• 1
  Enter the number of shares vesting and the stock price
  Use the share price on the actual vesting date, not your grant price or a recent market price. The vesting date price establishes your ordinary income and your cost basis.
• 2
  Select your withholding method
  Most companies use sell-to-cover at the 22% supplemental rate. Some let you elect a higher rate. If you know your company uses a different method, adjust accordingly.
• 3
  Enter your estimated total income for the year
  Include all income sources: salary, bonus, and the value of all RSU vesting events this year, including this one. This determines your actual marginal rate.
• 4
  Set your state income tax rate
  If you live in Texas, Florida, Washington, Nevada, or another no-income-tax state, enter zero. Otherwise, use your state's rate for earned income.

How to interpret your results

• The withholding gap is often thousands of dollars.At a 32% marginal rate with 22% withholding, every $100,000 of RSU income creates a $10,000 gap that you owe at tax time. On a $300,000 vesting event, that is a $30,000 surprise in April if you have not planned for it. This calculator makes that number visible before it becomes a problem.
• Your cost basis is set at vesting, not at grant.When you eventually sell the shares, the taxable gain or loss is calculated from the share price on your vest date, not when the option was granted. This matters a lot for your records. Keep a log of every vesting event with the date and price.
• Selling immediately eliminates capital gains complexity.Many RSU recipients sell shares immediately at vesting. When you do this, there is essentially no capital gain to report since the shares were just valued at your sale price. You simplify your taxes and eliminate stock concentration risk at the same time. Whether that tradeoff makes sense depends on your conviction in your company and your existing equity exposure.
• Holding creates capital gains exposure.If you hold vested shares and sell later at a higher price, the gain above your cost basis is taxed as capital gains. Hold for more than one year from the vest date and those gains are taxed at the long-term rate, which is typically 0%, 15%, or 20% depending on your income, significantly lower than ordinary income rates.
• Multiple vesting events in one year add up.If you have quarterly vesting, you may have four separate vesting events in a year, each creating ordinary income and a withholding gap. It is worth totaling the expected gap at the start of the year and making estimated quarterly tax payments rather than waiting for a large balance due in April.

Common mistakes to avoid

• Assuming employer withholding covers the full tax bill.The 22% default withholding is a floor, not your actual rate. High earners are almost always under-withheld on supplemental income like RSUs and bonuses. This is the most common source of surprise tax bills for tech and sales professionals.
• Not tracking your cost basis.Your brokerage should track this, but mistakes happen, especially if you have changed brokerages or the shares have been transferred. Keep your own records of vesting dates and prices. You will need this information every time you sell shares.
• Holding shares out of loyalty without a plan.Many employees hold company stock because they feel obligated or bullish on the company. But if a single stock represents more than 10 to 15% of your net worth, you have significant concentration risk. RSU vesting is a natural opportunity to diversify, and tax-efficient sell-down strategies exist.
• Missing estimated tax payment deadlines.If you expect to owe more than $1,000 in federal taxes at year end, you may owe underpayment penalties. For employees with large vesting events, this is a real risk. Making quarterly estimated payments starting with the quarter in which shares vest eliminates the penalty and avoids a large lump sum in April.
• Treating RSUs like a bonus rather than like compensation.RSU income is compensation. It affects your effective tax rate, your MAGI for Roth eligibility and backdoor Roth calculations, your eligibility for deductions, and other income-based determinations. Plan around it the same way you would plan around a salary increase.