How this calculator works
Your grant vests in equal parts each year of the vesting period. Each tranche is valued at the expected share price that year and taxed as ordinary income at your rate when it vests. Gains or losses after vesting are capital gains.
Worked example
With the example values below: Total value at vesting, $145,998 ($99,279 after tax). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Total RSUs granted | 1,000 |
| Current share price | $120 |
| Vesting period | 4 yrs |
| One-year cliff? | Yes |
| Expected share price growth / yr | 8% |
| Tax rate on vestingFederal supplemental 22% plus state and FICA | 32% |
How RSUs vest
Most RSU grants vest over three or four years. A common schedule is a one-year cliff, when 25% vests, then the rest monthly or quarterly. Some companies, especially in tech, front-load vesting. Each time units vest, they turn into shares that you own outright.
The calculator assumes equal annual vesting and lets you set an expected share price growth rate, so you can see a range of outcomes.
The withholding gap
When RSUs vest, the full value is taxable income, and employers usually sell or withhold shares to cover tax. Federal withholding on supplemental income is typically a flat 22%, rising to 37% on supplemental pay above $1 million in a year. If your actual marginal rate is 32%, 35% or 37%, you'll owe more at tax time.
Add state and payroll taxes and the total can be well above what was withheld. Set aside cash or make estimated payments to avoid a surprise bill.
Hold or sell vested shares
A useful test: if you'd been paid the same amount in cash, would you use it to buy your employer's stock? If not, selling at vest and diversifying is reasonable. Selling right away creates little or no additional gain, because your cost basis is the value at vesting.
Holding a lot of employer stock ties your paycheck and investments to one company. Many planners suggest keeping any single stock under about 10% of your net worth. See the asset allocation calculator.
Avoiding double taxation
Your cost basis for vested shares is their value on the vesting date, which was already taxed as income. Brokerage 1099-B forms sometimes show a zero or incomplete basis for RSU shares, so check the supplemental information and adjust it on Form 8949. Otherwise you could pay tax on the same income twice.
Frequently asked questions
What is an RSU?
A restricted stock unit is a promise from your employer to give you company shares once you meet a vesting condition, usually staying for a set time. You pay nothing for them, and they become ordinary shares when they vest.
How are RSUs taxed?
The market value of the shares on the day they vest is taxed as ordinary income, like salary. Employers usually withhold federal tax at the 22% supplemental rate (37% on supplemental pay over $1 million), which can be less than you owe. When you later sell, any change in price since vesting is a capital gain or loss, long-term if you held the shares more than a year.
What happens to unvested RSUs if I leave my job?
They're usually forfeited. Shares that have already vested are yours to keep. Some companies accelerate vesting on a layoff, acquisition or retirement, so check your grant agreement.
Should I sell my RSUs when they vest?
Many people do, to diversify and lock in the value. Selling at vest usually creates little extra tax because your basis equals the vesting-day value. Keep shares only if you'd buy the stock with the same amount of cash.
Why do I owe taxes on RSUs at tax time?
Employers usually withhold federal tax at a flat 22% on vesting income, which is less than the marginal rate for many people with significant equity pay. The difference is due when you file.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.