RSU Tax Calculator
Vesting shares to income, withholding, and net.
What it does
Restricted stock units convert to wages on vesting day: shares times price counts as ordinary income whether sold or held. Federal withholding takes a flat supplemental slice while states and payroll taxes take more. Net lands below gross fast.
The tool above multiplies shares by fair value for income, applies 22 % federal withholding, and nets the rest before state and payroll taxes. It also flags the stepped basis that later sales measure against.
IRS supplemental-wage rules with investor-education guides frame RSU taxation: income at vest, withholding at flat tables, capital treatment only after. Same-day sell-to-cover locks basis and ends the story cleanly.
Plan the vest, not just the grant. Withholding gaps surprise in April, concentrated stock doubles employer risk, and state taxes vary widely. Diversify deliberately once shares land.
How to use
- Enter shares vesting.
- Enter fair value per share.
- Read ordinary income.
- Read federal withholding at 22 %.
- Read net before state and payroll.
- Track basis for later sales.
Formula
- shares
- Shares vesting now.
- FMV
- Fair market value per share at vest.
Federal supplemental flat rate to $1 million in a year; state, Social Security, and Medicare add on top. Net here means after federal withholding only. Later sales use vest-day value as basis.
Worked example
Example: 500 shares at $80
500 RSUs vesting at $80 per share.
- 500 shares vest at $80 fair value.
- Income: 500 x 80 = $40,000.00.
- Federal withholding at 22 %: 40000 x 0.22 = $8,800.00.
- Net before state: 40000 - 8800 = $31,200.00.
- Basis steps to $80 for later sales.
Reference table
| Layer | Rate/base | Note |
|---|---|---|
| Ordinary income | Shares x FMV | Wages that day |
| Federal withholding | 22 % flat | To $1M supplemental |
| State tax | Varies | Withheld or estimated |
| Payroll taxes | To wage bases | SS plus Medicare |
| Later sales | Capital rules | From stepped basis |
Limits
- Federal withholding only. State and payroll add on.
- Flat 22 % to $1M supplemental; past it differs.
- Later sales need lots and dates.
- Estimates, not tax filings.
Common mistakes
- Spending gross instead of net.
- Forgetting state withholding gaps.
- Losing basis records for later sales.
- Holding concentrated stock by inertia.
- Missing estimated payments on big vests.
Try it yourself
Quick checks. Answers sit tucked under each question.
120 shares at $150?
Income is 120 x 150 = $18,000.00. Withholding is $3,960.00. Net is $14,040.00.
1000 shares at $45?
Income is 1000 x 45 = $45,000.00. Withholding is $9,900.00. Net is $35,100.00.
Questions
When are RSUs taxed?
Wages at vest: shares times fair value counts as ordinary income that year. Later sales add capital gain or loss from the stepped basis.
What rate withholds?
22 % federal flat to $1 million supplemental (37 % past it in the withholding tables), plus state and payroll taxes. Withholding rarely equals the final bill.
What is sell to cover?
Sell-to-cover: the broker sells enough shares for taxes and delivers the rest. Same-day sales lock the $80 basis with no extra gain.
What basis do vested shares get?
Fair value on vest day, usually the closing price. It becomes the cost basis for later sales, so track it per lot.
What else comes out?
State income tax where applicable plus Social Security and Medicare to wage-base limits. High earners add the extra Medicare slice.
Should I hold vested shares?
Concentration risk: salary and savings ride one ticker. Diversify deliberately after vesting instead of holding by inertia.