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RSU Tax & Cost Basis Calculator

Estimate the tax when your RSUs vest, the extra you may owe at filing because 22% withholding wasn't enough, and your real cost basis — so you're not taxed twice when you sell.

Your RSUs can be taxed twice if you're not careful — once as income at vesting, again as capital gains at sale. The trap: your broker often reports a $0 cost basis, so you pay income tax a second time on money you already paid tax on. This tool shows your real cost basis and the exact tax to avoid overpaying.
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Use your top federal bracket — e.g. 24%, 32%, 35% or 37%.
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Tick this if your wages already exceed the annual SS limit — the 6.2% no longer applies.
When you sell (optional)
Leave blank to estimate vesting tax only.
⚠ Likely still owed at filing
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Beyond what your employer already withheld.
Income added to your W-2
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Total tax at vesting
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Employer withheld (est.)
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After-tax value
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Your cost basis
— /share · — total
This is your cost basis — when you sell, make sure your 1099-B / Form 8949 shows this, NOT $0. Otherwise you pay income tax twice.
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How to use it

  1. Enter the shares vesting and the share price (FMV) on the vesting date.
  2. Enter your marginal federal rate and the withholding rate your employer uses (usually 22%).
  3. Add an optional state rate, and tick the box if you're already over the Social Security cap.
  4. Optionally enter a sale price and holding period to see capital gains tax and the double-tax you avoid.

How it's estimated

At vesting, the full value of the shares is ordinary income — taxed like salary, plus Social Security and Medicare. That same vesting value becomes your cost basis. When you later sell, only the change since vesting is a capital gain.

Estimate for U.S. taxpayers. Uses your stated marginal rate rather than computing brackets; ignores the 3.8% NIIT, the 0.9% additional Medicare surtax and deductions.

What happens when RSUs vest

Restricted Stock Units aren't taxed when they're granted — only when they vest. On the vesting date, the full market value of the shares is treated as ordinary income and added to your W-2, exactly like salary. That means federal income tax, state income tax, Social Security and Medicare all apply. Your employer usually sells or holds back some shares to cover withholding.

The 22% withholding trap

By default, employers withhold federal tax on RSU income at the 22% supplemental rate. If your real marginal rate is higher — 32%, 35% or 37% — that withholding falls short, and the gap lands on you at tax time. High earners are routinely surprised by a five-figure bill in April for exactly this reason. The 'likely still owed' number above is that shortfall; consider adjusting your W-4 or making an estimated payment.

The double-taxation trap (the big one)

Here's the mistake that costs people the most. When your RSUs vest, you already paid income tax on their value — and that vesting value becomes your cost basis. But brokers frequently report a $0 cost basis on the 1099-B. If you file as-is, the IRS taxes the entire sale proceeds as a capital gain, making you pay tax a second time on income you were already taxed on. The fix: on Form 8949, adjust the cost basis to the vesting-date FMV (adjustment code B). Always keep the W-2 / statement that shows your vesting value.

Short-term vs long-term after vesting

After vesting you own ordinary shares, and the clock starts. Sell within a year and any gain is short-term, taxed at your ordinary rate. Hold more than a year and it's long-term, taxed at the preferential 0/15/20% federal rate. Many people sell immediately at vesting (basis ≈ sale price, so little or no gain) to diversify — a perfectly valid choice — but if you hold, the holding period matters.

A quick example

200 shares vest at $50 = $10,000 of income. At a 32% marginal rate your employer withholds only 22% ($2,200), but you actually owe about $3,200 in federal income tax — a ~$1,000 gap before FICA and state. Your cost basis is $50/share. If you sell a year later at $70, your gain is just ($70−$50)×200 = $4,000. But if the broker reported $0 basis, you'd be taxed on $14,000 — overpaying tax on $10,000 you already paid income tax on.

Final word

RSUs are real money, but the tax mechanics catch a lot of smart people off guard. Two habits protect you: plan for the withholding gap so April isn't a shock, and always correct your cost basis so you're never taxed twice. When the numbers are large, confirm them with a qualified tax professional.

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Frequently asked questions

When are RSUs taxed?

Twice. At vesting, the share value counts as ordinary income (the same as wages). When you later sell, any gain since the vesting price is a capital gain. There is no tax at grant.

Why do people get double-taxed on RSUs, and how do I avoid it?

Your broker's 1099-B often reports a $0 cost basis. If you don't fix it, the value you already paid income tax on at vesting gets taxed again as a capital gain. On Form 8949 you adjust the basis to the vesting-date FMV (code B). This calculator shows that basis.

Is the default 22% withholding enough?

Often not. 22% is the standard federal supplemental-wage withholding rate. If your marginal bracket is 32%, 35% or 37%, you'll owe the difference at filing — that's the 'likely still owed' figure here.

Do RSUs owe Social Security and Medicare?

Yes. Vesting income is subject to FICA — 6.2% Social Security (up to the annual wage cap) and 1.45% Medicare, plus a 0.9% additional Medicare surtax for high earners. (This differs from ISOs.)

How long until my sale is long-term?

The holding period starts on the vesting date. Sell more than one year later for long-term rates (0/15/20%); a year or less is short-term, taxed at your ordinary rate.

What about RSUs for non-U.S. residents or W-8BEN holders?

The rules differ and usually involve withholding rather than normal filing. See our capital gains & W-8BEN guide for non-resident treatment.

Methodology & sources

Calculations follow standard U.S. treatment of RSU income and capital gains. References: IRS Publication 525 (Taxable and Nontaxable Income), Form 8949 instructions, and the Social Security Administration annual wage base. Tax year 2026. Last updated 2026-06.

⚠️ Educational estimate only — NOT tax advice. Your actual tax depends on your full income, filing status, state, residency and current law. Confirm with a qualified tax professional before acting.
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