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Estimate vest tax

Do RSUs get hit with Social Security and Medicare tax?

RSU vest income is usually wages for payroll tax purposes. you may see FICA on your vest pay stub.

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Usually yes: Because value is treated as wages, payroll taxes. Social Security and Medicare, generally apply at , separate from income tax . That is part of why total on a can be larger than the federal income tax line alone.

Why this happens

income is compensation, so it is generally subject to the same payroll taxes as your salary.

Social Security tax applies up to an annual wage base limit that changes each year; once you pass it, that piece stops for the year.

Medicare tax applies to wages without a wage-base cap, and an additional Medicare tax can apply at higher wage levels.

These payroll taxes are withheld alongside income tax, which is why the total taken from a is more than just the income-tax portion.

What to check

  • Your pay stub around the for Social Security and Medicare lines.
  • Whether you already passed the Social Security wage base earlier in the year.
  • Whether your wages are high enough for additional Medicare tax to appear.
  • That FICA was applied at , not deferred to a sale.
  • Whether two employers in one year over-withheld Social Security.

Common mistake

Watching only the federal income tax and ignoring payroll tax. FICA on a is real money withheld on top of income tax, and it is easy to forget when comparing the value to your net shares.

Example scenario (hypothetical)

Illustration only, not your tax situation.

Example: Lee vests $10,000 of early in the year. Income tax is withheld, and on top of that Social Security and Medicare are withheld because the is wages. Lee's total tax taken is larger than the income-tax line alone would suggest.

When to get help from a tax pro

  • You had two employers and may have over-paid Social Security.
  • You are unsure whether additional Medicare tax applies to you.
  • Your timing interacts with the annual wage base.
  • You see payroll tax on a you did not expect.

Related calculators

Related pages

For learning, not filing

Grants, employers, and states all differ. Use your own documents and a qualified tax professional before you make decisions from this guide.