RSU tax calculator.
Employers withhold RSU income at a flat 22% federal rate. Set your vest income, bracket and state to see roughly how much is still owed when you file.
A rough estimate: one marginal rate applied to all vest income. Not tax advice.
Book a call with usWhat to do about it.
Three ways to close the gap before April.
Quarterly estimates
Pay the gap in estimated payments on Apr 15, Jun 15, Sep 15 and Jan 15, timed around your vests.
More W-4 withholding
Raise withholding on your salary so it covers what the vests leave short.
A plan for the shares
Decide what to sell and when, so the tax is covered without selling at the worst time.
About this calculator.
Why is RSU withholding only 22%?
Employers treat RSU income as supplemental wages and usually withhold federal tax at the flat 22% supplemental rate, or 37% on supplemental wages above $1 million in a year. That rate ignores your salary, so it is too low for most people in the 32% bracket and above.
What does this estimate leave out?
It applies one marginal rate to all of your vest income and ignores Social Security, Medicare, deductions, credits and other income. Your real number depends on your whole return, which is what a planning call works out.
How do I avoid an underpayment penalty?
Generally by paying, through withholding or estimates, at least 100% of last year’s tax (110% if your prior-year AGI was over $150,000) or 90% of this year’s. We set up quarterly estimates around your vest dates.
Turn the estimate into a plan.
We will look at your salary, vest schedule and other income, and set up payments so April is a non-event.