Phase 1 · Core Sovereign Layer
RSU Under-Withholding Calculator
Your RSUs were withheld at 22%. Your real rate isn't. See the shortfall waiting at tax time — and the quarterly payments that keep the IRS penalty away.
Why do I owe taxes on my RSUs if they were already withheld?
Because RSUs are withheld at the flat 22% supplemental rate, while they are taxed as ordinary income stacked on top of your salary. If your salary already pushes you into the 24%, 32% or higher bracket, every RSU dollar is taxed at that bracket but withheld at 22 — and the gap is the bill waiting in April.
- Actual federal tax on the vest = tax(salary + RSU) − tax(salary), not 22% of the RSU value.
- Worked example (2026, single, defaults on this page): a $180,000 salary plus 600 shares at $150 ($90,000 of RSU income) owes $25,770 of federal tax on the vest — an effective 28.6% — against $19,800 withheld. The shortfall is $5,970.
- That income lands in the 32% marginal bracket, which is why the flat 22% under-withholds by roughly a third of the true rate.
- State tax is usually withheld separately or not at all — at a 6% rate that is another $5,400. Cover the gap with quarterly estimates (about $1,493 each here) to avoid the underpayment penalty.
Under the hood
The math, fully exposed
RSUs stack on top of your salary, so their true tax is the difference your bracket charges (2026 brackets, standard deduction):
RSU income = shares × share price (ordinary income at vest)
Actual federal tax on RSUs = tax(salary + RSU) − tax(salary)
Withheld = RSU income × 22% (flat supplemental)
Shortfall = actual federal tax − withheld
Quarterly estimate = shortfall ÷ 4
- Stacking is the point: your RSUs are taxed at your top marginal rate, not an average, because they sit on top of your salary. The higher your salary, the bigger the 22% gap.
- FICA and state are separate: we model the federal income-tax shortfall. State withholding and Social Security/Medicare are handled on their own — add your state rate to see that exposure too.
- A roadmap, not a filing: this estimates the gap so you can pay it down evenly across the year and avoid penalties. A tax pro confirms your safe-harbor target.
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Answers
Frequently asked questions
Why do I owe more tax on RSUs that were already "taxed" at vesting?
When RSUs vest, their value is ordinary income — and your employer typically withholds federal tax at the flat 22% supplemental rate (the rate for supplemental wages under $1M). But if your total income puts you in the 32%, 35% or 37% bracket, 22% isn't enough. The gap between what was withheld and what you actually owe shows up as a surprise bill — plus possible underpayment penalties — at tax time.
What is the 22% supplemental withholding rate?
The IRS lets employers withhold a flat 22% on supplemental wages (bonuses, RSUs) up to $1M per year, rising to 37% above that. It's an administrative default, not your real rate. For someone in a high bracket it systematically under-withholds, which is exactly the trap this calculator measures.
How do I avoid an RSU tax penalty?
Cover the gap before the IRS does. Options: make quarterly estimated payments for the shortfall, ask payroll to withhold extra from your paycheck, or sell additional shares to set the cash aside. To dodge penalties, aim for the safe harbor — generally paying 110% of last year's tax (for higher earners) or 90% of this year's.
What is "sell-to-cover"?
Sell-to-cover automatically sells a portion of your vesting shares to pay the withholding. The catch: it usually only covers the flat 22% (plus FICA), so if your real rate is higher, the remaining shares are yours — but so is the rest of the tax bill. Sell-to-cover is not the same as fully covering your taxes.