RSU Tax Calculator

Frequently asked questions

Plain-language answers for common RSU tax questions.

Are RSUs taxed when they vest?

Yes. When RSUs vest, the market value is typically treated as ordinary W-2 wages. Your employer usually reports it on your W-2 and withholds taxes. similar to a cash bonus. You generally do not owe income tax on unvested RSUs until they vest (unless you made an 83(b) election, which is rare for RSUs).

Why is my RSU withholding at the flat supplemental rate?

The IRS allows employers to withhold supplemental wages (including many RSU vests) at a flat federal rate for amounts under $1 million. That rate is a withholding convenience, not your final tax rate. If your marginal federal rate is higher than the flat rate. common for many tech workers. the flat withholding may not be enough.

Will I owe more taxes after RSUs vest?

Often, yes. especially if you are in a tax bracket above 22% federal, live in a high-tax state, or hit Social Security and Medicare limits differently than expected. Withholding is an estimate; your actual tax depends on your total annual income, deductions, credits, and other factors.

Should I sell RSUs immediately?

Many people sell some or all RSUs at vest to pay taxes and reduce concentration in one stock. Holding after vest means you take market risk; any gain or loss after vest is generally a separate capital gains event. This calculator focuses on taxes at vest, not post-vest investment strategy.

Do state taxes apply to RSUs if I move?

State taxation of RSUs can depend on where you lived and worked when shares vested, your employer's reporting, and state sourcing rules. Moving mid-year can make state taxes more complex. This tool uses a simplified flat state estimate, not a multi-state allocation.