Methodology

Methodology controls for this calculator

  • Official sources are listed with the date checked and what each source supports.
  • Federal scope, state/local exclusions, and assumptions are shown before any reader relies on an estimate.
  • Pages marked source-checked are not treated as expert-reviewed unless an external professional is named.
  • Material corrections update the page, date, and changelog instead of silently changing tax claims.

How this calculator works

The calculator estimates ordinary income at vest, then applies editable withholding and payroll tax rates. It separates withholding from final tax because withholding is only a prepayment.

Methodology checks

  • Inputs are processed in the browser and are not stored by Equity Tax Lab.
  • The result separates estimated withholding from final tax liability.
  • Official sources are listed below so readers can verify the rule family behind the estimate.

Example scenario

If 1,000 RSUs vest at $25 per share, estimated ordinary income is $25,000. At a 22% supplemental withholding rate, federal withholding would be $5,500 before payroll tax.

Common mistakes

  • Using withholding as if it were final tax liability.
  • Ignoring state and local taxes when planning cash needs.
  • Forgetting that brokerage, payroll, and Form W-2 reporting can differ by transaction type.

When to stop and verify

  • The transaction crosses tax years, state lines, or employer payroll systems.
  • The result affects an 83(b) election, ISO exercise timing, estimated tax payment, or AMT exposure.
  • Your brokerage, Form W-2, Form 1099-B, or grant documents use terms that differ from the calculator inputs.

FAQ

Are RSUs taxed when they vest?

For most U.S. employees, RSUs create ordinary wage income when they vest and shares are delivered. The later sale can create capital gain or loss.

Is 22% withholding my final tax rate?

No. Supplemental withholding may be lower or higher than your final marginal tax rate after all income, deductions, credits, and other facts are considered.

Official sources

These links are used to verify the source family behind the page. They do not replace professional advice for personal facts.