How do RSUs (Restricted Stock Units) get taxed?
RSUs are taxed as ordinary income at the time they vest, not when you receive the grant. The taxable amount is the fair market value of the shares on the vesting date, and your employer is required to withhold taxes — often at a flat federal supplemental rate of 22% (or 37% if your income exceeds ~$1M). Because your actual marginal rate may be higher (32–37% for many tech workers), the standard withholding is often insufficient, leaving you with a tax underpayment. You should calculate your expected RSU tax gap and make estimated tax payments or adjust your W-4 withholding to compensate. Use the RSU & ESPP Calculator at wealthserene.com/tools/rsu-espp-calculator to model your liability.
Educational disclaimer. Everything on WealthSerene.com is educational and is not investment advice. Projections and calculations are illustrative; actual results depend on market conditions, your situation and factors outside this tool’s scope. For a decision specific to your situation, consult a qualified financial professional. View full disclosures