How to Calculate RSU Tax: A Step-by-Step Guide 2026

What RSU tax is

Restricted stock units are a promise: your employer will give you shares on a future date. When that date arrives, the shares vest — and the tax arrives with them. The key concept is that RSUs have no cost basis. You did not pay for the shares, so there is nothing to subtract. The whole fair market value on the vest date is ordinary income, the same as a cash bonus. That is why the tax looks so big: 100 shares at $150 are $15,000.00 of income, and the tax on it is $5,197.50.

Step 1: Find the ordinary income

Multiply the shares vesting by the fair market value of one share on the vest date — usually the closing price that day. With 100 shares at $150.00, the income is $15,000.00. With 500 shares it is $75,000.00. The price matters as much as the share count: at $50 a share the income is $5,000.00 and at $1,000 it is $100,000.00. Everything that follows is a percentage of this one number.

Step 2: Federal withholding at 22%

Your employer withholds federal tax at 22%, the supplemental-wage rate. On $15,000.00 of income that is $3,300.00. The 22% is withholding, not your final tax rate — your return reconciles it against your real bracket. The 37% supplemental rate applies once your supplemental wages pass $1,000,000 in the year: at 37% the federal withholding on $15,000.00 is $5,550.00 and the total tax is $7,447.50.

Step 3: State tax

Multiply the same income by your state tax rate. At 5% the state tax on $15,000.00 is $750.00. If your state has no income tax, the rate is 0% and the state tax is $0.00 — the total tax falls to $4,447.50 and the net rises to $10,552.50. At 9.3%, California’s top rate, the state tax is $1,395.00 and the total is $5,842.50.

Step 4: Social Security and the wage base

Social Security takes 6.2% of the income, but only up to the wage base — $184,500 for 2026. On $15,000.00 the Social Security is $930.00. At $2,500 a share the income is $250,000.00, so the Social Security is 6.2% of $184,500 — $11,439.00. That cap is why the effective rate falls at high prices: the total tax on $250,000.00 is $83,014.00, an effective rate of 33.21%. The price where the cap first bites is $1,845.00 a share — at that price the income is exactly $184,500.00 and the Social Security is $11,439.00, while at $1,844.00 it is $11,432.80.

Step 5: Medicare and the extra 0.9%

Medicare takes 1.45% of the whole income, plus an extra 0.9% on the part above $200,000 — the additional Medicare tax. On $15,000.00 the Medicare is $217.50 and there is no extra tax. At $2,500 a share the income is $250,000.00, so the Medicare is $3,625.00 plus $450.00 of additional tax — $4,075.00 in total. Unlike Social Security, Medicare never caps.

Step 6: Add it up and keep the rest

Add the four taxes. On the defaults the total is $3,300.00 plus $750.00 plus $930.00 plus $217.50, which is $5,197.50. Subtract it from the income and the net cash is $15,000.00 minus $5,197.50, which is $9,802.50. The effective rate is $5,197.50 divided by $15,000.00, which is 34.65%. Totals are computed from unrounded values, so rounded parts may differ by a cent from their rounded sum.

The worked example

100 shares, $150.00 a share, 22% federal, 5% state. Income: 100 times $150.00 is $15,000.00. Federal: $15,000.00 times 22% is $3,300.00. State: $15,000.00 times 5% is $750.00. Social Security: $15,000.00 times 6.2% is $930.00. Medicare: $15,000.00 times 1.45% is $217.50. Total: $3,300.00 plus $750.00 plus $930.00 plus $217.50 is $5,197.50. Net cash: $15,000.00 minus $5,197.50 is $9,802.50. Net shares: 100 minus $5,197.50 divided by $150.00 is 65.35. Effective rate: 34.65%.

Working backwards

The shares for $10,000 net cash are 102.01 shares (exact 102.0148 shares); at 102.02 shares the income is $15,303.00 and the net is $10,000.51, at 102.01 shares the net is $9,999.53. The price for $20,000 ordinary income is $200.00 — exactly the income. The price for $10,000 total tax is $288.60 (exact 288.6003); at $288.60 the income is $28,860.00 and the total is $9,999.99, at $288.61 the total is $10,000.34. The federal rate for $5,000 federal withholding is 33.33% (exact 33.3333%); at 33.33% the federal withholding is $4,999.50, at 33.34% it is $5,001.00. The shares for $5,000 federal withholding are 151.52 shares (exact 151.5152 shares); at 151.52 shares the income is $22,728.00 and the federal withholding is $5,000.16, at 151.51 shares it is $4,999.83. The price for Social Security to hit the wage-base cap is $1,845.00; at $1,845.00 the Social Security is $11,439.00 and the Medicare is $2,675.25, at $1,844.00 the Social Security is $11,432.80.

When the numbers change

At $2,500 a share the income is $250,000.00, the Social Security caps at $11,439.00, the Medicare adds $450.00 of additional tax, and the total is $83,014.00 at an effective rate of 33.21%. At a 37% federal rate the total is $7,447.50 and the net is $7,552.50. At a $10,000 share price the income is $1,000,000.00, the federal withholding is $220,000.00, the state tax is $50,000.00, the Social Security is $11,439.00, the Medicare is $21,700.00, the total is $303,139.00 and the net is $696,861.00.

Withholding is not your final tax

The most common mistake is treating the 22% as the tax you owe. It is not. It is the withholding your employer takes because RSUs are supplemental wages. Your return works out your real bracket on your whole income — and if your real rate is higher than 22%, you owe the difference; if it is lower, you get it back. The second mistake is forgetting the state: a 5% state rate adds $750.00 to a $15,000.00 vest. The third mistake is holding the shares and forgetting the vest price: the gain or loss from the $150.00 vest price is taxed as capital gain or loss when you sell.

How this connects

Run your own numbers with the RSU tax calculator; for the quarterly payments behind the withholding, see the estimated quarterly tax calculator; for the wage base itself, see the 2026 Social Security wage base page.