RSU Tax Calculator (Restricted Stock Units)

Model the full federal tax cost of RSU vesting (ordinary income) and subsequent sale (capital gains).

CA 9.3-13.3%, NY 6.85-10.9%
Net Cash After All Tax
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Sale proceeds minus all federal and state tax
Vesting Value
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Withholding at Vest (~37%)
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True Tax at Vest
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Sale Proceeds
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Capital Gain (or Loss)
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Tax on Sale Gain
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How RSUs Are Taxed

RSUs are taxed at vesting, not at grant. When RSUs vest, the fair market value of the vested shares is ordinary income — added to your W-2 wages. Federal supplemental withholding is a flat 22% (37% for amounts over $1M of supplemental wages in the year). State withholding and FICA (Social Security + Medicare, 7.65%) also apply. Many high earners are UNDERWITHHELD because the 22% supplemental rate is below their true marginal rate (32-37%).

After vesting, you hold the shares with a cost basis equal to the vesting price. Any subsequent appreciation is capital gain (short or long-term). Source: IRS Publication 15-A, Section 83. Last updated: May 2026.

The Same-Day Sale Default

Most public-company RSU vests trigger a same-day sale via your broker (E*TRADE, Schwab, Morgan Stanley). The company sells enough shares to cover the 37% supplemental tax withholding, you receive the remainder in cash or shares. Then you can sell the rest the same day to fully diversify, hold for long-term cap gains, or DCA out.

Same-day sell rationale: you're already exposed to your employer through salary, 401(k) match, and continued vesting. Holding additional vested shares concentrates risk in one company. Most CFAs advise selling at least 80% of vested RSUs same-day and diversifying.

Avoiding the April 15 Surprise

If your marginal rate exceeds 22% federal (most professionals), the 22% supplemental withholding is insufficient. Year-end you owe additional federal tax. Fixes: (1) Increase your W-4 additional federal withholding to cover the gap, (2) Pay quarterly estimated tax (Form 1040-ES), (3) Set aside the difference in cash at each vesting event.

Critical example: $250K base salary + $200K RSU vest. The 22% withholding on $200K = $44K. True federal tax at 32% marginal = $64K. Gap = $20K owed April 15. Plus state. Plan ahead.

RSU Cliff Vesting vs Graded Vesting

Cliff vesting: all-at-once after a period (e.g., 100% after 1-year cliff). Risky — leaving before cliff forfeits ALL RSUs. Graded vesting: incremental (e.g., 25% per year over 4 years, or 1/16 quarterly after 1-year cliff). Smoother tax exposure. Most US tech companies use 1-year cliff + quarterly/monthly vesting thereafter. Source: Schwab Equity Comp Guide.