RSU Tax & Withholding-Gap Calculator
RSU Tax & Withholding-Gap Calculator
The 22% withholding won't cover what you actually owe
Withheld automatically
0
flat 22% federal supplemental rate
Actually owed
0
at your real marginal rate + state
Gap you'll owe at tax time
0
set this aside now, don't get surprised in April
Why the gap exists
Payroll withholds RSU vests at a flat 22% federal supplemental rate (37% on the portion of a single vest above $1M) regardless of your actual bracket — anyone earning enough for meaningful RSUs is usually well above 22% marginal.
Cost basis reminder
Your cost basis in vested shares is the value at vest (already taxed as income) — selling immediately at vest triggers little to no additional capital gains tax; holding and selling later is taxed on the gain since vest.
Federal supplemental withholding on RSU vests is a flat 22% up to $1,000,000 of supplemental wages in a year, and 37% on any amount above that threshold (not modeled separately here for simplicity — if a single vest exceeds $1M, your actual withholding will be higher than this estimate suggests). "Actually owed" approximates your marginal rate applied to the vested value, which is a simplification: RSU income stacks on top of your other income and can push some of it into a higher bracket than a flat marginal-rate estimate captures. This is a directional estimate to help you plan a tax-time set-aside, not a substitute for running your actual numbers with a tax preparer.
Frequently asked questions
How do federal tax brackets actually work?
The US uses a progressive, marginal system -- only the income within each bracket is taxed at that bracket's rate, not your entire income at your top rate. This is why your effective (average) tax rate is always lower than your marginal (top) bracket rate, a distinction this calculator shows explicitly.Read more: Paycheck Calculator: What Actually Lands in Your Account
What's the difference between a tax deduction and a tax credit?
A deduction reduces your taxable income before tax is calculated, so its value depends on your bracket. A credit reduces your tax bill directly, dollar for dollar, regardless of bracket -- which generally makes credits more valuable than a deduction of the same nominal size.Read more: Capital Gains Tax Calculator: What You’ll Really Owe the IRS
How is capital gains tax calculated on stocks/funds?
Assets held over one year qualify for long-term capital gains rates, which are generally lower than ordinary income tax rates; assets held one year or less are taxed as short-term gains at your regular income tax rate. Holding period alone can meaningfully change the tax owed on the same gain.Read more: Federal Income Tax Calculator: Find Your Real Tax Bracket
Should I contribute to a traditional or Roth account?
Traditional accounts (401(k), IRA) give you a tax deduction now and are taxed on withdrawal in retirement; Roth accounts are funded with after-tax money now and grow completely tax-free. Broadly, if you expect to be in a lower tax bracket in retirement than today, traditional tends to win, and vice versa for Roth -- this calculator lets you compare both with your own numbers.Read more: Paycheck Calculator: What Actually Lands in Your Account
Estimates only, not financial advice. See our Disclaimer.
