RSU Tax Calculator
Enter a vest to see what it really adds to your 2026 federal tax against what your employer withholds, the Social Security and Medicare on it, how many shares are sold to cover, and the cost basis to use when you sell.
Federal rules for tax year 2026. Everything runs in your browser; nothing you enter is sent anywhere. For education only, not tax advice.
The vest
Per share, from your vest confirmation
22% is the flat supplemental rate most employers use
For the $1M line where withholding jumps to 37%
Your year
Your own wages, without this vest
A spouse's wages, interest
Your state's supplemental rate
Optional: to see the gain on these shares
Withholding falls short by about
$35,400
This vest adds $101,400 to your federal tax, 33.8% of its value, but only $66,000 is withheld. Set the gap aside, or raise your withholding or estimated payments, to avoid a bill and a penalty.
Income from the vest
$300,000
on your W-2
Federal withheld
$66,000
22.0% of the vest
Federal tax it adds
$101,400
33.8% of the vest
Social Security
$0
6.2% to the wage base
Medicare
$7,050
1.45% + 0.9% over $200k
Shares sold to cover
244
of 1,000
Your cost basis is $300 a share, not zero
You already pay tax on the $300,000 at vest. Brokers usually report a basis of $0 on Form 1099-B for these shares, including the ones sold to cover. On Form 8949, use code B and adjust the basis up to the value at vest, or the same income is taxed again.
How this is worked out. The tax a vest adds is your federal tax on salary plus the vest, minus the tax on salary alone. Withholding is the flat 22% up to $1,000,000 of bonuses and vests in the year and 37% above it. The difference is what to set aside.
Uses 2026 federal brackets and the standard deduction. Social Security is figured for one employer; with two employers in a year you may overpay and claim it back. State figures are flat rates on the vest. Your employer may use the aggregate withholding method instead of the flat rate.
22% is a withholding rate, not your tax rate
Vests are withheld at a flat 22%. On a large vest the tax it adds is figured at your top brackets, often 32% or 35%, so the gap can run to tens of thousands of dollars.
Over $1 million, 37% is mandatory
Once bonuses and vests in a year pass $1,000,000, everything above is withheld at 37%, whatever your W-4 says.
Your basis is the price at vest
You were taxed on the shares when they vested. A $0 basis on Form 1099-B taxes that income again unless you correct it on Form 8949.
Social Security stops, Medicare does not
Social Security tax stops at the $184,500 wage base for 2026; Medicare continues, with an extra 0.9% withheld above $200,000 of wages.
Frequently asked questions
How are RSUs taxed?
When shares vest and are delivered, their value that day is wages: it goes on your W-2 and is taxed at your ordinary rates, with Social Security and Medicare. That value becomes your cost basis. When you later sell, only the change in price since the vest is a capital gain or loss, long-term if you held more than a year after the vest.
Why do I owe tax when my RSUs were already withheld?
Employers usually withhold federal tax on vests at the flat supplemental rate of 22%, the rate set for 2026 after the 2025 tax law made the brackets permanent. If your income puts the vest in the 24%, 32%, 35% or 37% bracket, 22% is not enough, and the gap is due when you file. Above $1 million of bonuses and vests in a year, the rate rises to a mandatory 37%.
What cost basis do I use when I sell RSU shares?
The value at vest, which you already paid tax on. Brokers often report a basis of $0 on Form 1099-B for RSU shares, including the ones sold to cover tax. On Form 8949, use code B and adjust the basis up to the value at vest; otherwise the same income is taxed a second time.
What is sell-to-cover?
Your employer sells enough of the vesting shares to pay the withholding: federal at the supplemental rate, state, Social Security and Medicare. You receive the rest. Those sold shares are a sale too and appear on your 1099-B, usually with almost no gain or loss once the basis is corrected.
How do I avoid an underpayment penalty on RSU income?
Generally, pay through withholding and estimated payments at least 100% of last year's total tax (110% if last year's AGI was over $150,000), or 90% of this year's. Raising your W-4 withholding works too, and withholding counts as paid evenly through the year. A large vest late in the year is the usual cause of a surprise bill.
Sources and references
- IRS Form 8949 instructions: adjusting the basis shown on Form 1099-B
- IRS Publication 525: taxable and nontaxable income (stock options, ESPP, RSUs)
- IRS Publication 15 (2026): supplemental wage withholding at 22% and 37%
- Treas. Reg. 1.6045-1(d)(6)(ii): brokers may not include compensation income in basis
- Rules encoded as of 27 October 2026 for tax year 2026.
Disclaimer: This calculator is for educational purposes only and does not constitute tax or investment advice. It uses 2026 federal brackets with the standard deduction and flat state rates, and assumes one employer for Social Security. Confirm with your payroll records and a tax professional.
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