USA 2026 • Withholding Gap Estimator
RSU Tax Calculator
Your employer withholds a flat 22% on vested RSUs — but your real tax rate is usually higher. See the gap before it becomes a surprise bill.
When your RSUs vest, the IRS treats the value as ordinary income, and your employer withholds federal tax at a flat 22% supplemental rate (37% above $1M in a single vest). The problem: once that RSU income stacks on top of your regular salary, your real marginal tax rate is often 24%, 32%, or higher — meaning the 22% withholding doesn't cover what you actually owe. This calculator shows you that gap, plus what happens if you sell immediately versus hold for long-term capital gains.
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Withholding gap • Net proceeds
Frequently Asked Questions
Why does my employer only withhold 22% on RSUs?
The IRS classifies RSU income as supplemental wages, which by default are withheld at a flat 22% federal rate (37% on the portion of a single vest exceeding $1 million), regardless of your actual tax bracket. If your combined salary and RSU income puts you in the 24%, 32%, or 35% bracket, the 22% withholding will not cover your real tax liability, creating a withholding gap you may owe at filing time.
When are RSUs taxed — at grant, vesting, or sale?
RSUs are taxed as ordinary income at vesting, based on the fair market value of the shares on the vesting date — not at grant. If you hold the shares after vesting and the price changes before you sell, that additional gain or loss is taxed separately as a capital gain or loss when you sell.
Should I sell my RSUs immediately or hold them?
Selling immediately at vesting avoids any additional capital gains tax since there has been no price change yet, and many financial planners recommend this to avoid overconcentration in a single company's stock. Holding for over a year before selling qualifies any further appreciation for long-term capital gains rates, which are lower than ordinary income rates, but exposes you to the stock's price risk in the meantime.
What is sell-to-cover?
Sell-to-cover is when your employer automatically sells enough of your newly vested shares to pay the required tax withholding, and deposits the remaining shares into your account. It is the most common settlement method and requires no cash from you, but it does reduce your total share count.
How do I avoid an unexpected tax bill from RSU vesting?
Estimate your true marginal tax rate (not the 22% withholding rate) using a calculator like this one, then either make a quarterly estimated tax payment for the shortfall or submit a new W-4 requesting additional withholding from your regular paycheck to cover the gap.