RSU tax calculator 2026: what a vest really costs
Vesting RSUs are withheld at 22% no matter your bracket. Enter a vest amount to see the federal tax it actually creates, the withholding gap, and what reaches your account.
Updated November 4, 2026 Sources and methodology
Federal income tax only. Employers withhold Social Security (6.2% up to the annual wage base) and Medicare (1.45%, plus 0.9% on wages above $200,000 single or $250,000 joint) separately, so the net figure above is before payroll tax.
What the calculator is doing
Vesting RSUs are wages. Your employer adds the vest-date value to your W-2 income and withholds a flat 22% on it, because the IRS classifies RSU income as supplemental wages (Publication 15, 2026). That flat rate has nothing to do with your bracket. This tool computes the tax the vest actually adds:
- Total federal tax on (other wages + RSU value), using the 2026 brackets and standard deduction.
- Federal tax on other wages alone.
- The difference is the true tax cost of the vest; dividing by the vest value gives your effective rate on it.
If your marginal bracket is above 22%, the difference between that true cost and the amount withheld is what you owe in April. That gap is the usual surprise for employees paid partly in stock.
Worked example: $120,000 salary, $40,000 RSU vest, single
Total taxable income is $160,000 minus the $16,100 standard deduction, or $143,900. Federal tax on that is $27,134. On salary alone the tax is $17,570. The vest therefore adds $9,564, an effective 23.9% rate, but $8,800 is withheld at the flat 22%, leaving $764 unpaid. Raise the salary to $250,000 and the same $40,000 vest costs $13,330 (33.3%), while withholding stays at $8,800: a $4,530 hole.
Where the money actually goes
| Item | Rule for 2026 |
|---|---|
| Ordinary income at vest | Full FMV, W-2 box 1 |
| Supplemental withholding | 22%, or 37% above $1M |
| Cost basis | FMV at vest |
| Holding period | Starts at vest |
| Standard deduction (single) | $16,100 |
| Top bracket threshold (single) | $640,600 |
The underwithholding fix
You have three levers: raise withholding on your salary with a new W-4, ask the broker to withhold at a higher rate (many support 22% or 37% only, some allow a flat percentage), or pay quarterly estimated tax. Paying at least 90% of the current year's liability, or 100% of last year's (110% if AGI exceeded $150,000), avoids the underpayment penalty even if a balance remains due.
Frequently asked
How are RSUs taxed when they vest?
The market value of the shares on the vest date is ordinary wage income. It appears in box 1 of your W-2 and is subject to income tax, Social Security and Medicare. Your cost basis in the shares equals that value, so tax is roughly neutral at vest if you sell immediately, and capital gain or loss starts from there.
Does a large vest push me into a higher tax bracket?
It can, but only the income above each threshold is taxed at the higher rate. The vest stacks on top of your salary, so it fills your current bracket first and then spills into the next one. That is why the effective rate on a $50,000 vest sits between the flat 22% withheld and your top marginal rate.
Do I owe tax if I never sell the shares?
Yes. Vesting is the taxable event for RSUs, not selling. Selling afterward only creates a capital gain or loss measured from the vest price, which matters for the holding period and for capital loss harvesting.
What is sell-to-cover and is it enough?
Sell-to-cover means the broker withholds enough shares to cover the statutory 22% (plus payroll taxes). It covers the withholding, not your actual tax bill. This calculator shows the gap so you can increase withholding elsewhere or make a quarterly estimated payment.
Sources. Brackets and standard deduction: IRS Rev. Proc. 2025-32. Withholding rules: IRS Publication 15 (Circular E), 2026. This is an educational estimate for tax year 2026 and does not account for deductions, credits, additional Medicare tax, or state-specific rules. Verify with a CPA before acting.