RSU Calculator

Restricted stock units (RSUs) are the dominant form of equity compensation at large US tech employers — Amazon, Google, Meta, Microsoft, Apple, NVIDIA, Netflix, Salesforce, Adobe, Oracle. An RSU is a promise: when vesting conditions are met (typically time-based, sometimes performance-based), the employer delivers actual shares of stock to your brokerage account. At delivery, the fair market value (FMV) is taxed as ordinary wages on your W-2. This calculator computes: gross vest value = shares × stock price; federal supplemental withholding at 22% (or 37% above $1M YTD); state supplemental withholding (e.g. CA 10.23%, NY 11.7%, 0% in TX/FL/WA/NV/SD/TN/NH/AK/WY); FICA = Social Security (6.2% up to the $176,100 wage base for 2026) + Medicare 1.45% + Additional Medicare 0.9% on wages over $200K single / $250K MFJ. Net cash after withholding is what lands in your brokerage account.

Standard 'big tech' vesting: 4 years total, 1-year cliff, monthly vesting after cliff. At grant, 0 shares vest. On the 1-year anniversary, 25% of the grant vests as a single block (the cliff). For the next 36 months, 1/48th of the grant vests monthly. Variants: Amazon historically used a 5/15/40/40 backloaded schedule (now changed for new hires); Meta and Google have used flat quarterly vesting; Microsoft uses 5-year vesting in some grant types. Refresher grants are layered on top of original grants — a senior engineer typically has 4-7 active grants vesting in parallel by year 3. Your offer letter and the equity plan document (often hosted on Carta, Shareworks, or the in-house equity portal) are authoritative; do not trust verbal descriptions.

Per IRS Publication 15 (Circular E), Section 7, employers withhold federal tax on supplemental wages (RSUs, bonuses, commissions) at a flat 22% on the first $1,000,000 of supplemental wages per calendar year, and 37% on amounts above $1M. This is the WITHHOLDING rate — your actual marginal tax bracket at filing may be higher: 32% applies to single filers over ~$197K (2026 estimated), 35% over ~$250K, 37% over ~$626K. A high earner whose marginal rate is 35% but withholding rate is 22% under-withholds by 13% on every RSU vest, leading to a $13,000 surprise on every $100K of vested RSUs at filing. Mitigate by saving 10-15% of every vest in a tax-savings account or paying quarterly estimated taxes via Form 1040-ES.

California Franchise Tax Board (FTB) Publication 1017 specifies a 10.23% supplemental withholding rate for stock-related supplemental wages — separate from the 6.6% rate on non-stock bonuses. At filing, California taxes total taxable income at marginal rates from 1% to 13.3% (the highest US state rate), plus the 1.1% Mental Health Services tax surcharge on income over $1M. A senior California engineer with $400K total income hits a 9.3-10.3% California marginal rate, so the 10.23% supplemental rate is roughly accurate — but a CFO at $2M+ pays 13.3% + 1.1% = 14.4%, well above the 10.23% withholding. Multi-state employees: California can tax RSU income attributable to workdays-in-California during the vesting period even after relocation; see FTB Schedule R-2 if you moved during the vesting window.

RSUs = promised shares delivered post-vest, full FMV taxed as ordinary income at vest. Stock options (ISOs, NSOs) = right to buy shares at a fixed strike price within a window. ISOs: no tax at exercise IF held 1 year past exercise + 2 years past grant; spread between strike and sale price = long-term capital gain (15-20%). NSOs: ordinary income tax on (FMV − strike) at exercise; subsequent gain/loss = capital. Options have leverage and tax advantages but require capital to exercise and expire worthless if stock < strike. Post-2010s, most large US tech RSU-converted rank-and-file equity grants; options are now rare at public-company hires (still common at startups). For private startups: ISOs are still preferred over RSUs because no tax-at-vest disaster.

When you sell vested RSU shares, the difference between sale price and vest-day FMV is a capital gain or loss. Short-term (held ≤ 1 year): taxed at ordinary rates up to 37% federal + state. Long-term (held > 1 year): 15% federal LTCG (single income $44K-$518K), 20% above $518K, plus 3.8% Net Investment Income Tax (NIIT) for high earners (single MAGI > $200K, MFJ > $250K). State capital gains rates: CA treats LTCG as ordinary income (up to 13.3%); NY similar; WA has a 7% LTCG tax on gains over $250K (since 2022); FL/TX/NV/WY no state tax. Cost basis = vest-day FMV per share (NOT $0 — adjust on Form 8949 if the 1099-B shows $0 to avoid double tax).

The default RSU settlement at major employers is sell-to-cover: at vest, the broker (Fidelity NetBenefits, E*TRADE Stock Plan, Schwab Stock Plan Services) automatically sells enough shares at the vest-day market price to cover federal + state + FICA withholding. The remaining shares are deposited as long stock in your brokerage account. Example: 1,000 shares vest at $200; combined withholding ~35% = $70,000; broker sells ~350 shares; ~650 shares (plus any tiny rounding gain/loss) end up in your account. Microsoft uses Net Share Settlement (NSS) instead — no 1099-B is generated, the company effectively withholds shares and the employee gets fewer net shares without a brokerage transaction. Both produce identical net economics; NSS just has simpler tax forms.

Amazon: until 2023 used 5/15/40/40 backloaded schedule (5% Y1, 15% Y2, 40% Y3, 40% Y4); after Feb 2023 changed to frontloaded vesting for new hires to compete with Google/Meta. Google: 4-year monthly vesting after 1-year cliff, refreshers issued annually for senior roles. Meta: 4-year quarterly vesting after 1-year cliff, refreshers in performance cycles. Microsoft: 5-year monthly vesting for some grant types, 4-year for others; uses Net Share Settlement. Apple: 4-year quarterly vesting on the half-year boundary. NVIDIA: 4-year quarterly, refreshers tied to performance reviews. Always confirm with your specific offer letter and equity plan document — public articles describe the typical case, not edge cases (executive grants, M&A retention RSUs, transfer-in grants).

Pre-IPO startups (late-stage private companies like Stripe, SpaceX, Databricks, OpenAI, Anthropic in earlier years) often issue 'double-trigger' RSUs: trigger 1 = time-vesting (4-year monthly); trigger 2 = liquidity event (IPO or acquisition) within ~7 years. No tax owed until both triggers fire. The lesson learned from Facebook's pre-IPO era: single-trigger RSUs created enormous tax bills on illiquid shares. At liquidity event, ALL previously time-vested shares vest at once and create a massive ordinary income tax event in that year, often before the IPO lockup expires (typical 180-day lockup) and you can sell. Plan for 35-50% federal + state tax on the full IPO-day FMV; coordinate with a CPA before the IPO is announced.

The 22% federal supplemental rate is fine for taxpayers in the 22-24% marginal bracket but under-withholds for everyone in 32%/35%/37%. The gap can be 13-15 percentage points × every dollar of RSU income. Example: $200K of RSU vests for a single filer with $300K total taxable income — actual marginal rate is 35%, but only 22% was withheld. Shortfall = $26,000 owed at April filing. Three remedies: (1) Save 10-15% of every vest in a high-yield savings account ear-marked for tax; (2) Pay Q4 estimated tax via IRS Direct Pay (Form 1040-ES) by Jan 15; (3) Increase Q4 paycheck withholding via Form W-4 'additional amount' (IRS treats withholding as evenly paid across the year). Avoid the under-payment penalty by meeting safe harbor: 100% of prior year tax (110% if AGI > $150K).

UK: RSUs are 'Restricted Stock Awards' under HMRC ERS rules. Taxed as employment income at vest via PAYE: 20% basic / 40% higher / 45% additional. Class 1 NI: 8% employee / 2% above £50,270. Combined top marginal rate for £150K+ earners ≈ 47%. Capital gains on subsequent sale: 24% (higher rate) above £3,000 annual exemption. Canada: CRA treats RSUs as employment income, federal 15-33% + provincial 5-25% (Ontario top combined 53.5%, BC 53.5%, Alberta 48%). CPP/EI capped (2026 estimates: CPP max ~$73K, EI cap ~$66K). Post-vest gains: 50% inclusion rate up to $250K/year, 66.67% above. Australia: ATO Division 83A, vest = ordinary income at marginal rates 16-45% + 2% Medicare Levy. 50% CGT discount for shares held > 12 months.

Most personal-finance frameworks recommend selling RSUs at vest, full stop. Reasoning: (1) You're already over-concentrated — your salary, RSU, and 401(k) match all depend on this one company; another 10-30% of net worth in the same stock multiplies single-stock risk. (2) The tax cost of selling is already paid (RSU was taxed as ordinary income at vest); subsequent sale is just a capital gain/loss decision. (3) If you wouldn't BUY the company stock with cash at today's price, you shouldn't HOLD it either (the 'would you buy?' test). Common counter-arguments: (a) tax-loss harvesting if shares are underwater; (b) hold 1 year past vest to convert future gain from short-term to long-term LTCG; (c) blackout window or insider trading restrictions. Write an Investment Policy Statement (IPS) before the next vest — it removes emotional bias.