RSU Net After-Tax Calculator (Vest)
Calculate exactly how much of your RSU vest you keep after federal, state, and FICA taxes — and how many shares are withheld to cover the tax bill.
How RSU Taxation Works at Vesting
Restricted Stock Units (RSUs) are taxed as ordinary W-2 income on the date they vest. The taxable amount is the fair market value of the shares on the vest date multiplied by the number of shares vesting. This income is added to your wages and reported on Form W-2 in Box 1. Your employer withholds federal income tax at the supplemental rate (22% for most employees), Social Security, Medicare, and applicable state income taxes at the time of vest.
This means you owe taxes whether or not you sell the shares — the act of vesting itself is the taxable event. Shares are typically withheld (sell-to-cover or net settlement) to fund the tax payment. Source: IRS Publication 525, Taxable and Nontaxable Income. Last updated: May 2026.
Federal Withholding: 22% vs Your Actual Bracket
The IRS requires employers to withhold at a flat supplemental rate of 22% for RSU income below $1 million. However, if your marginal federal tax bracket is 32%, 35%, or 37%, you will owe more than was withheld. This creates a tax balance due in April. Many high earners make quarterly estimated tax payments (Form 1040-ES) to cover the gap and avoid underpayment penalties. If your total supplemental wages exceed $1 million in a year, the withholding rate jumps to 37%.
RSU Tax Summary by Income Level
| Gross Vest ($) | Federal (22%) | FICA (7.65%) | State (CA 13.3%) | Net (CA High Earner) |
|---|---|---|---|---|
| $50,000 | $11,000 | $3,825 | $6,650 | $28,525 (57%) |
| $100,000 | $22,000 | $7,650 | $13,300 | $57,050 (57%) |
| $200,000 | $44,000 | $15,300 | $26,600 | $114,100 (57%) |
Note: FICA phases out for Social Security once you exceed the annual wage base ($176,100 in 2026). If your salary already exceeds this, RSU income is only subject to Medicare tax (1.45%), dramatically reducing your FICA rate. Source: IRS Publication 15. Last updated: May 2026.
After Vesting: Capital Gains Clock Starts
Your cost basis in RSU shares is the fair market value on the vest date — the same figure reported as W-2 income. If you sell immediately, there is typically no capital gain (the sell price equals the basis). If you hold for 12+ months and then sell at a higher price, the appreciation is taxed at long-term capital gains rates (0%, 15%, or 20% depending on your income). Many financial advisors recommend diversifying promptly after vesting to avoid single-stock concentration risk.
Frequently Asked Questions
How are RSUs taxed at vesting?
When RSUs vest, the fair market value on the vest date is treated as ordinary W-2 income. Federal income tax (22% supplemental withholding), Social Security (6.2%), Medicare (1.45% + 0.9% AMT above $200K), and state income tax are all withheld. Source: IRS Publication 525.
What is the supplemental withholding rate for RSUs?
The IRS supplemental wage withholding rate is 22% for amounts up to $1 million and 37% above $1 million in supplemental wages per year. If you are in the 32-37% bracket, 22% withholding may under-withhold — consider estimated payments.
Do I owe FICA taxes on RSUs?
Yes. Social Security (6.2%) applies up to the 2026 wage base ($176,100). Medicare (1.45%) applies to all RSU income. If total wages exceed $200K single or $250K MFJ, 0.9% Additional Medicare Tax applies. Source: IRS Publication 15.
What is the cost basis of RSU shares after vesting?
Your cost basis is the fair market value on the vest date — the same amount reported as W-2 income. If you sell immediately, there is typically no additional capital gain. Appreciation held 12+ months is taxed as long-term capital gain. Source: IRS Publication 525.
Should I sell RSU shares immediately or hold them?
Most financial planners recommend selling RSUs promptly after vesting to avoid concentration risk. Holding exposes you to share price decline after already paying income tax on the vest value. Diversifying into a balanced portfolio is generally preferred unless you have specific conviction.
What is the Additional Medicare Tax on RSUs?
The Additional Medicare Tax of 0.9% applies to wages (including RSU income) above $200,000 for single filers or $250,000 for married filing jointly. Source: IRS Form 8959.
Can I defer RSU taxation?
Standard RSUs are taxed at vest — no deferral available. Some companies offer NQDC plans under IRC §409A that allow RSU settlement deferral. Section 83(i) elections allow up to 5-year deferral for qualifying private company RSUs.
What is net settlement for RSUs?
Net settlement means your employer withholds a portion of vested shares equal to the taxes owed, and delivers only the after-tax shares. You never receive the withheld shares — the company uses them to pay your withholding.
What if my company's RSU withholding is too low?
If withholding at 22% is below your actual marginal rate, you owe the difference when you file. Make quarterly estimated payments (Form 1040-ES) by the due dates (April 15, June 15, Sept 15, Jan 15) to avoid the underpayment penalty under IRC §6654.