RSU Tax Calculator

By clarifying your tax obligations, you can make informed decisions about selling shares, withholding taxes, and integrating RSUs into your financial plan. The calculator considers federal, state, medicare and social security taxes to give you a comprehensive calculation.
Use the Calculator ⬇️

Introduction

Our simple RSU tax calculator makes it easy to understand your potential tax liability. It's perfect for anyone looking to optimize their RSU strategy, regardless of experience level.

Don't let the 'complexities' of RSU taxes hinder you from fully utilizing your equity compensation. This page also covers general tips for how to manage RSUs + taxes.
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AdvisorFinder is a startup company, so we understand the nuances of equity comp firsthand. We noticed a significant gap when searching for reliable tools and information on how to calculate taxes for RSUs and other forms of equity compensation that are common with startups. Use this straightforward tool to plan your finances better and avoid any surprises.

Understanding the tax implications of your Restricted Stock Units (RSUs) can be challenging. Our RSU Tax Calculator makes it easy to get an instant estimate of the taxes you might owe when you sell your RSUs. Results are displayed in a simple chart comparing taxable income to estimated taxes.

RSU Tax Calculator

Estimate the taxes on your Restricted Stock Units when you sell them

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Your RSU Tax Estimate

Some financial advisors specialize in helping with RSUs, options and equity compensation. Find a financial advisor who works with clients like you on AdvisorFinder!

*By using this calculator, you agree to our Terms of Service and Privacy Policy.

**Important Notice: this is an estimate from an online calculator and should not be considered tax advice. This content is not meant to take the place of a CPA, financial advisor, or other financial professional(s) you may need to consult in order to properly manage your RSUs. Please use your discretion when making major financial decisions such as this.‍

How do I use the RSU tax calculator?

  1. Enter the Number of RSUs:
    • This is the total number of Restricted Stock Units you own.
    • ‍Input: Enter the total number of RSUs in the 'Number of RSUs' field.
    • Example: If you own 120 RSUs, input '120'.
  2. Enter the Unit Value:
    • This is the current market value per unit of your RSUs.
    • Input: Provide the current market price per unit in the 'Unit Value' field.
    • Example: If each RSU is valued at $64.00, input '64.00'.
  3. Enter Your Federal Tax Rate:
    • This is the percentage of your income that is taxed by the federal government.
    • Input: Specify your federal tax rate as a percentage in the 'Federal Tax Rate' field.
    • Example: If your federal tax rate is 24%, input '24.00'.
  4. Enter Your State Tax Rate:
    • This is the percentage of your income that is taxed by your state government.
    • Input: Provide your state tax rate as a percentage in the 'State Tax Rate' field.
    • Example: If your state tax rate is 5%, input '5.00'.
  5. Enter Your Total Salary:
    • This is your total annual salary, which helps in calculating your overall tax bracket.
    • Input: Enter your total salary in the 'Total Salary' field.
    • Example: If your total salary is $100,000, input '100,000'.
  6. Select Your Filing Status:
    • This determines your tax bracket and filing requirements (e.g., Single, Married Filing Jointly).
    • Input: Choose your filing status from the dropdown menu.
    • Example: If you are single, select 'Single'.
  7. Calculate Your Taxes:
    • Action: Click on the 'Calculate' button to get your results.
    • Output: The calculator will display the estimated total taxes you owe based on the inputs provided.

Important Notes

Medicare Tax: There is no cap on the Medicare tax rate.

Social Security Cap: The Social Security tax rate is applied up to the wage base limit of $160,200 for 2024.

Example Calculation

For instance, if you have 1,000 RSUs with a unit value of $50, a federal tax rate of 22%, and a state tax rate of 5%, the calculator will provide an estimated tax liability. This includes federal taxes, state taxes, Social Security, and Medicare contributions.

Formula Breakdown

1) Taxable Income: Number of RSUs * Unit Value

2) Federal Taxes: Taxable Income * Federal Tax Rate

3) State Taxes: Taxable Income * State Tax Rate

4) Social Security Taxes: Taxable Income * Social Security Rate (capped at $160,200 for 2024)

5) Medicare Taxes: Taxable Income * Medicare Rate
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Example Output

If you have 120 RSUs, and you sell all of them at once, you can expect to pay approximately $X,XXX.XX in taxes on this liquidity event.

How are RSUs taxed?

As you probably know, Restricted Stock Units (RSUs) are a form of equity compensation granted by an employer to an employee in the form of company stock. RSUs are often used as a tool to attract and retain top talent, especially in the tech industry and with startups.
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Unlike stock options, RSUs have no exercise price and always have some value to the recipient when they vest. However, they are considered "restricted" because they are subject to a vesting schedule, which means the employee does not receive the shares until certain conditions are met, such as continued employment for a period of time or achievement of specific performance goals.
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When RSUs vest, they are considered income and are subject to federal and state income taxes, as well as Social Security and Medicare taxes. The amount of income reported is equal to the fair market value of the shares on the vesting date, multiplied by the number of shares vested.

For example, if an employee is granted 1,000 RSUs that vest over four years and the stock price is $50 on the vesting date, the employee would owe taxes on $12,500 of income (250 shares x $50) for that year.

It's important to note that the taxes owed on RSUs can be significant, especially if the stock price has increased substantially since the grant date. RSU holders should plan ahead and consider strategies to manage their tax liability, such as selling shares to cover taxes or using a 83(b) election.

2025 Planning Update: What to Do After Running the Numbers

Now that you've calculated your RSU tax impact, the next step is having the right conversations with your financial advisor. The current market environment makes these discussions more critical than ever.

Your concentration risk might matter more now. With many tech stocks at high valuations and market uncertainty ahead, having too much wealth tied to your employer's stock is riskier than usual. If your calculations show more than 15% of your net worth in company stock, ask your advisor for a specific diversification timeline.

Tax timing is important. Large vesting events this year could push you into higher tax brackets. Use your calculator results to ask your advisor: "Should I sell immediately when shares vest, or hold for long-term gains?" They should factor in your tax situation, the stock's outlook, and your overall financial goals.

Plan for the tax bill before it hits. If your calculations show a big tax liability coming, don't wait. Ask your advisor about adjusting your withholdings now or setting aside cash to cover the payment. Getting surprised by a large tax bill in April is avoidable.

Get specific about diversification. The generic advice to "diversify away from company stock" isn't enough. Your advisor should help you create a plan: How much should you sell each quarter? Where should those proceeds go? How do you balance tax efficiency with risk reduction?

One of the key questions for your advisor: "Based on these numbers, what's our specific plan for managing my equity compensation this year?" They should give you concrete steps, not just general guidance.

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AdvisorFinder makes it easy to connect with financial advisors who understand the complexities of managing wealth. 

💼📊 Browse financial advisors who specialize in Equity Compensation

Looking for guidance to make the most of your equity compensation? Connect with advisors who specialize in helping clients navigate RSUs, ESPPs, and stock options. Find an advisor based on your financial goals. Browse our open marketplace.

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As a tech professional, your financial needs are unique. Find an advisor who understand the challenges and opportunities of equity compensation, rapid career growth, and tech-industry-specific tax strategies. Browse the AdvisorFinder marketplace.

Understanding RSU Tax Withholding

When your RSUs vest, your company will typically withhold a portion of the shares to cover the required tax withholding. The two most common methods are:

  1. Net Shares: The company withholds a number of shares equal in value to the tax liability. You receive the remaining shares.
  2. Sell to Cover: The company sells enough shares to cover the tax withholding obligation. You receive the remaining shares and cash from the sale.
👉 read Carta's Guide on RSUs, particularly the section on “Sell to Cover”
(not sponsored - we just like their guide)

Some companies may also offer a cash settlement option, where they pay the taxes in cash and you receive the full number of vested shares.
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Supplemental Wage Withholding Rate

RSUs are typically treated as supplemental wages for tax purposes. The IRS flat rate for supplemental wage withholding is 22%. However, if your supplemental wages exceed $1 million in a calendar year, the excess is subject to a 37% withholding rate.

Keep in mind, your actual tax liability may be higher or lower than the amount withheld, depending on your individual tax situation. You may need to make estimated tax payments or adjust your W-4 withholding to avoid underpayment penalties.

Frequently Asked Questions about RSU Taxes

Restricted Stock Units (RSUs) can be tricky to understand, especially when it comes to taxes. We've gathered the most common questions about RSUs and provided clear, concise answers to help you make informed decisions. This FAQ section offers essential information for both newcomers to RSUs and those looking to deepen their understanding.

What are RSUs and how do they differ from stock options?

A: RSUs (Restricted Stock Units) are a form of equity compensation where an employee is granted company stock over time. Unlike stock options, RSUs have no exercise price and always have some value when they vest.
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When do I pay taxes on my RSUs?

A: You typically pay taxes on RSUs when they vest. At this point, the fair market value of the vested shares is considered taxable income.
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How accurate is this RSU tax calculator?

A: While our calculator provides a good estimate, it's important to remember that individual tax situations can vary. We recommend using this as a starting point and consulting with a tax professional for more precise calculations.
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Does the calculator account for Alternative Minimum Tax (AMT)?

A: No, this calculator does not account for AMT. If you're subject to AMT, your tax situation may be more complex and we recommend consulting a tax professional. Looking for ISO AMT calculation? Click here.
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What is the difference between vesting and selling RSUs?

A: Vesting is when you gain ownership of the RSUs and owe taxes on their value. Selling is when you convert the shares to cash, which may trigger additional capital gains taxes if the stock price has increased since vesting.
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How does the "sell to cover" strategy work with RSUs?

A: "Sell to cover" is when your company sells just enough shares at vesting to cover the required tax withholding. You receive the remaining shares, allowing you to retain more equity in the company.
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Can I use this calculator for RSUs from multiple grants or vesting dates?

A: This calculator is designed for a single RSU grant or vesting event. For multiple grants or vesting dates, you may need to calculate each separately and combine the results.
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How do RSUs affect my overall tax bracket?

A: RSUs are considered supplemental income and are added to your regular income. This additional income could potentially push you into a higher tax bracket for the year they vest.
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What if my company is private? How do I determine the "Unit Value" for the calculator?

A: For private companies, you may need to use the fair market value as determined by your company's most recent 409A valuation. Consult your HR or finance department for this information.
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How often should I recalculate my RSU tax liability?

A: It's a good idea to recalculate whenever you receive a new RSU grant, when RSUs vest, or when there are significant changes in your company's stock price or your personal tax situation.

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