RSU Tax Calculator - Calculate Tax on Restricted Stock Units
Free calculator to estimate federal withholding, FICA taxes, and net take-home value of vesting RSUs for 2025
RSU Tax Calculator 2025
Results
What is an RSU Tax Calculator?
An RSU Tax Calculator is a free financial tool that helps employees estimate the taxes owed when Restricted Stock Units (RSUs) vest. RSUs are taxed as ordinary income at vesting based on the fair market value, and this calculator computes federal withholding, FICA taxes (Social Security and Medicare), state taxes, and your net take-home value after all tax obligations.
This calculator is essential for:
- RSU vesting planning - Know your net value before shares vest
- Tax withholding estimates - Calculate federal, FICA, and state taxes accurately
- Cash flow planning - Plan for tax bills if sell-to-cover is insufficient
- Stock compensation strategy - Compare total compensation including RSUs
- Year-end tax planning - Estimate total income including RSU vesting
For calculating taxes on another form of stock compensation, use our ESPP Gain Calculator to determine gains and tax liability on employee stock purchase plan sales.
To understand bonus taxation which uses similar supplemental wage withholding, explore our Bonus Tax Calculator for comprehensive supplemental income tax calculations.
For evaluating total federal income tax including RSU income, check our Federal Income Tax Calculator to see complete annual tax liability and effective rate.
To calculate capital gains tax on RSU shares sold after vesting, try our US Capital Gains Tax Calculator for accurate short-term and long-term capital gains taxation.
How RSU Tax Calculator Works
The calculation follows IRS guidelines for supplemental wage withholding and equity compensation (2025):
Gross RSU Value
Gross Value = Shares Vesting × Share Price at Vesting
Federal Withholding (Supplemental Wages)
Federal Tax = Gross Value × 22% (if RSU value < $1M)
Federal Tax = Gross Value × 37% (if RSU value ≥ $1M)
FICA Taxes
Social Security = Gross Value × 6.2% (up to $176,100 wage base)
Medicare = Gross Value × 1.45% (all income)
Additional Medicare = 0.9% if total income > $200K single
State Tax
State Tax = Gross Value × State Tax Rate
Net Proceeds
Net = Gross Value - (Federal + FICA + State)
The calculator also computes how many shares remain after sell-to-cover tax withholding, helping you understand your actual equity position.
Key Concepts Explained
RSU Vesting
RSUs vest over time per your grant schedule (e.g., 25% annually over 4 years). At vesting, shares convert to actual stock ownership and trigger immediate tax liability based on fair market value on the vesting date.
Supplemental Wage Withholding
RSUs are taxed as supplemental wages at vesting, using the flat 22% federal withholding rate (or 37% for over $1M). This is the same method used for bonuses, and the withheld amount may differ from your actual tax liability.
Sell-to-Cover
Most companies use sell-to-cover settlement, automatically selling enough vested shares to cover tax withholding. The remaining shares are deposited to your brokerage account. You don't pay cash for taxes upfront with this method.
Double Taxation Misconception
RSUs are not double-taxed. You pay ordinary income tax at vesting. If you sell shares later, only the gain (or loss) from vesting FMV to sale price is taxed as capital gains, not the original vesting value.
How to Use This Calculator
- Enter RSU shares vesting - Input the number of RSU shares vesting in this event (check your equity grant portal for vest schedule)
- Enter share price at vesting - Input the fair market value per share on the vesting date (your company will provide this, usually the prior day's closing price)
- Enter your annual salary - Your regular annual salary helps calculate Medicare Additional Tax and provides context for total income tax planning
- Select filing status - Choose Single, Married Filing Jointly, Married Filing Separately, or Head of Household for accurate tax calculations
- Enter state tax rate - Input your state's income tax rate (use 0 for states with no income tax like Washington, Texas, or Florida)
- Click Calculate - View your net proceeds, total taxes withheld, effective tax rate, and shares remaining after sell-to-cover instantly
- Review the breakdown - Analyze federal, FICA, and state tax components to understand your total tax obligation and plan accordingly
Benefits of Using This Calculator
- Accurate tax estimates - Calculate exact federal, FICA, and state tax withholding using 2025 IRS rates and Social Security wage base limits
- Financial planning precision - Know your actual net proceeds to plan major purchases, investments, or debt payoff with certainty
- Avoid tax surprises - Identify if withholding is insufficient for your tax bracket and plan for additional payments to avoid penalties
- Equity compensation clarity - Understand true value of RSU grants by calculating after-tax proceeds and comparing to cash compensation
- Sell-to-cover insights - See exactly how many shares you'll retain after taxes, helping you make informed hold vs sell decisions
- Year-end tax planning - Estimate total tax impact when large RSU vesting events push you into higher brackets or trigger AMT considerations
Factors That Affect Your Results
- RSU value threshold - RSU value over $1 million is withheld at 37% instead of 22%, significantly increasing federal withholding on large vesting events
- Social Security wage base - If you've already earned $176,100 in 2025 from salary, your RSU vesting is exempt from the 6.2% Social Security tax
- Additional Medicare tax - High earners pay extra 0.9% Medicare tax on income over $200K (single) or $250K (married), affecting RSU withholding
- State tax rates - State income tax ranges from 0% (no tax states like WA, TX, FL) to over 13% (CA), dramatically affecting net RSU proceeds
- Actual vs withholding rate - 22% withholding may be less than your marginal rate if you're in the 32%+ bracket, creating tax liability at year-end
- Vesting date share price - Higher share price at vesting means higher tax basis, reducing future capital gains but increasing immediate ordinary income tax
Frequently Asked Questions
How are RSUs taxed at vesting?
RSUs are taxed as ordinary income at vesting based on the fair market value on the vesting date. Your employer withholds federal, FICA, and state taxes (typically 22-37% federal plus 7.65% FICA).
What is the difference between single-trigger and double-trigger RSUs?
Single-trigger RSUs vest based on time only. Double-trigger RSUs require both time passage and a liquidity event (like an IPO or acquisition). Double-trigger RSUs are common in pre-IPO companies.
Can I reduce RSU tax withholding?
No, you cannot avoid tax withholding at vesting since RSUs are taxed as ordinary income. However, you can offset future liability by contributing to 401(k), HSA, or increasing W-4 withholdings to avoid underpayment penalties.
Are RSU sales subject to capital gains tax?
Yes, if you hold RSU shares after vesting and sell later, any price change from vesting FMV to sale price is taxed as capital gains. Short-term (under 1 year) or long-term (over 1 year) rates apply.
What is sell-to-cover for RSUs?
Sell-to-cover means your company automatically sells enough RSU shares at vesting to cover tax withholding obligations. The remaining shares are deposited in your brokerage account. This is the most common RSU settlement method.
Do I owe additional taxes beyond withholding?
Possibly yes. If your effective tax rate is higher than the withholding rate (22% for federal), you'll owe additional taxes when filing. High earners often owe more, especially if RSUs push them into higher brackets or trigger AMT.