RSU Tax Calculator: Will 22% Withholding Cover It? (2026)
Employers withhold a flat 22% federal tax on vesting RSUs, but for most tech professionals the shares are taxed at 32%, 35% or 37%. Enter your pay and this year's vests to see the gap and plan for it now.
Your employer withholds 22% federal tax on vesting shares, but these RSUs are taxed at about 27% on average, with the last dollar at 32%.
- Pay it as an estimated payment. The last payment for 2026 is due January 15, 2027.
- Raise the federal withholding on your regular paycheck (Form W-4). Withholding counts as paid evenly through the year, so it can cover earlier quarters.
- Ask whether your plan lets you elect a higher withholding rate on vesting shares.
2026 federal brackets and standard deduction. Assumes your regular paycheck withholding covers the tax on your salary, and that RSUs are the only supplemental wages (22% withholding, 37% above $1 million). Washington doesn't tax wages today, so RSUs aren't taxed by the state when they vest (its new 9.9% tax on income over $1 million is scheduled to start in 2028). Gains on shares you later sell may count toward Washington's capital gains tax. Doesn't include the 0.9% Additional Medicare Tax. Educational estimate, not tax advice.
What the calculator does.
- Calculates your 2026 federal income tax with and without the RSUs, using the 2026 brackets and standard deduction. The difference is the tax your RSUs actually add.
- Compares that with the supplemental withholding your employer takes: 22%, or 37% on supplemental wages above $1 million.
- Assumes the withholding on your regular paycheck covers the tax on your salary, which is usually close for W-2 employees.
Common questions
Why do I owe tax on RSUs if shares were sold to cover taxes?
Sell-to-cover pays the withholding, and withholding on RSUs is a flat 22% federal. If your income puts the shares in the 32%, 35% or 37% bracket, the difference is still owed when you file.
Does Washington tax my RSUs?
Not when they vest: Washington doesn't tax wages today. Its new 9.9% tax on income over $1 million is scheduled to begin in 2028. When you later sell shares, long-term gains can count toward Washington's 7% capital gains tax once your total gains pass the annual standard deduction ($278,000 for 2025).
How do I avoid an underpayment penalty?
Pay enough during the year to meet the safe harbor: 90% of this year's tax or 110% of last year's if your AGI was over $150,000. Extra W-4 withholding counts as paid evenly through the year, so it's the easiest way to catch up late in the year.
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