Equity compensation, explained with your own numbers
If you're paid partly in stock, three numbers matter most: what your company withheld when the shares vested, what the vest actually costs in tax, and how much of your net worth is now in one stock. Withholding on a vest commonly uses the IRS optional flat supplemental rate of 22%. On a $90,000 vest for a household with $361,500 of salary, that is $19,800 against $22,860 of federal tax on the vest, a shortfall of $3,060 settled at filing. The pages below cover each one. Educational only.
Where to start
Most questions about equity pay fall into three groups, usually in this order.
- What did this vest actually cost me? Withholding and tax are two different numbers. Any difference is usually settled when you file.
- What do I do with the shares? The vest already created wage income. Whether you keep the stock is a separate decision from how it was taxed.
- What will my return look like? Earlier decisions show up in your cost basis, on Form 8949 and in your estimated tax payments.
You can answer the first one without learning every grant type.
Why 22% is not your tax rate
A vest is supplemental wages. Employers commonly withhold federal income tax on it at the optional flat rate of 22%. That is a withholding rate, not your tax rate. If part of your vest is taxed at a rate above 22%, the tax on that part is more than what was withheld.
On a $90,000 vest for a married couple with $361,500 of salary in California: $19,800 withheld federally, $22,860 of federal tax on that vest, a shortfall of $3,060. California withheld $9,207 against $8,370 of state tax, so the state side is over by $837. Sample figures, computed for 2026, not anyone's return.
The effective rate on that vest is 25.4% federally, against 22% withheld. That difference is why a vest that looked fully covered can still leave a balance due at filing.
The pages
Each page starts with a short answer. It then works through a labeled sample and names the source for every rate.
- Why 22% withholding often is not enoughHow the shortfall is calculated, and what changes it.
- How RSUs are taxed at vest and at saleGrant, vest and sale, in one table.
- Does sell to cover mean the tax is handledWhat the vest notice does and does not tell you.
- What happens between now and AprilThe withholding and estimated tax calendar.
- Qualifying and disqualifying ESPP salesWhy a qualifying sale is not always the cheaper one.
- The cost basis trap on Form 8949How the same income can be taxed twice.
- How much of your net worth is one companyWhen your pay and your savings depend on the same stock.
- Qualcomm RSU withholdingThe same calculation on a Qualcomm vest calendar.
What does your state withhold on a vest?
State withholding on supplemental wages follows its own rule, published separately from the federal one, and it is frequently a different number from the state's income tax schedule. One table carries every verified jurisdiction, each with the document its figure was read from and the date it was last read against that document.
What does your state withhold when RSUs vest?
A state not listed there is one whose schedule has not been read first-hand and confirmed, so it is left out rather than estimated. The modeler routes those to your own entry.
How this site works
The tools run in your browser. Your figures are calculated in your browser and are not sent to any server; only a stock ticker is sent when a share price is looked up. Nothing is saved after you close the tab unless you ask the modeler to keep it. There is no account and no sign-up. Seeing your own number should not cost an email address.
Every rate on these pages traces to a published document, named with its revision and the date it was last read. Where a figure has not been verified first-hand it is left out rather than estimated, and the tool routes you to your own entry instead.
Questions people ask
Is 22% the tax rate on RSUs?
No. 22% is the IRS optional flat rate an employer may use to withhold federal income tax on supplemental wages. The vest is ordinary income on your Form W-2 and your return applies the normal graduated rates to it. The tax on the vest depends on which brackets it falls into, so it can be more or less than what was withheld.
Why did I owe tax if my company sold shares to cover it?
Selling to cover funds the withholding, not the final tax. If the withholding method used a flat rate below the rate that applies to your income, the difference is still owed at filing. On the sample above the difference is $3,060.
Does my state make the shortfall worse?
Not always, and in California it commonly does the opposite. California withholds 10.23% on bonuses and stock options, the category an employer commonly applies to a vest, which on the sample vest is $9,207 against $8,370 of California tax, an excess of $837. A state surplus does not reduce a federal bill, so the two are tracked separately.
Do these pages give tax advice?
No. They describe what published rates and your own entries produce, and stop there. Your filing status, other income, credits, deductions, payroll settings and plan documents control your actual result. A decision belongs with your own tax professional.
Try it with your own numbers
Enter a vest amount and your household income and the check returns a directional figure in about ten seconds.
Free to use, and your figures stay in your browser.
These pages explain each piece on its own. Applying them to your own year is what a conversation is for.