What is sell-to-cover?

Sell-to-cover is when your employer automatically sells a portion of your vesting RSUs to cover federal and state tax withholding. You receive the remaining (net) shares. The tax is based on the FMV at vest.

What is the RSU federal withholding rate?

RSUs are typically withheld at 22% federal for amounts under $1 million, and 37% for amounts over $1 million (supplemental wage rates). Plus 6.2% Social Security (up to wage base), 1.45% Medicare, and state taxes.

How many shares do I keep after sell-to-cover?

Net shares = RSUs vesting minus (tax withheld ÷ FMV per share). For example, 100 RSUs at $150 with $6,000 tax withheld = 40 shares sold to cover, 60 net shares received.

When do I pay capital gains tax on RSU shares?

You pay income tax at vest. When you later sell the shares, you pay capital gains tax only on the gain (sale price minus FMV at vest). If you sell immediately after vest, the gain is near zero.

How does state tax affect RSU take-home?

High-tax states (California 10.23%, New Jersey 10.75%) withhold more on RSU vesting than no-tax states (Texas, Florida, Washington, Nevada). On a $15,000 vest, California state withholding can be ~$1,500+ more than Texas. Use the calculator with your state for exact numbers.

RSU Tax Calculator

Estimate tax withholding on RSU vesting. See gross income, tax withheld, sell-to-cover shares, net shares received, after-tax value, and tax bracket impact.

RSU Vesting Details

Enter the number of RSUs vesting and fair market value to estimate tax withholding and net shares.

Number of RSUs vesting

Fair market value (FMV) per share ($)

Filing status

State

Other annual income (salary, bonus, etc.)

Used for Social Security wage base, Medicare threshold, and tax bracket impact.

After sell-to-cover

60.12 shares

$9,018 after-tax value

Gross: $15,000Tax withheld: $5,982 (39.9%)Shares sold: 39.88

Gross RSU income

$15,000

Estimated tax withheld

$5,982

Marginal bracket

24%

Effective tax on RSU

45.0%

Marginal bracket: 24%

Federal Income Tax (supplemental 22%)

Flat 22% supplemental wage withholding

$3,300(22.0%)

Social Security (6.2%)

6.2% on vest value

$930(6.2%)

Medicare (1.45%)

1.45% on all wages

$218(1.4%)

State Tax (CA)

CA supplemental withholding

$1,535(10.2%)

AMT note: RSUs are taxed as ordinary income at vest and generally do not trigger Alternative Minimum Tax (AMT). AMT typically applies to incentive stock options (ISOs) when you exercise and hold. RSUs vest as compensation and are taxed like salary.

Supplemental wage withholding

Employers typically withhold RSU vesting at 22% federal (37% on amounts over $1M) plus state supplemental rates and FICA. This calculator assumes the flat supplemental method. Your actual withholding may vary if your employer uses the aggregate method.

Quick RSU Vest Take-Home Estimates (Federal + FICA Only)

$10,000

~$7,035

after ~~$2,965 tax

$25,000

~$17,588

after ~~$7,412 tax

$50,000

~$35,175

after ~~$14,825 tax

$100,000

~$70,350

after ~~$29,650 tax

*Estimates before state tax. Use the calculator above for your exact numbers including state withholding and sell-to-cover.

How RSU Tax Works

RSUs (restricted stock units) are taxed as ordinary income when they vest, not at grant. The fair market value (FMV) of the shares on the vest date is added to your W-2 wages.

Employers typically withhold at the supplemental wage rate: 22% federal (37% on amounts over $1M), plus state supplemental rates and FICA (Social Security 6.2%, Medicare 1.45%).

With sell-to-cover, your employer sells some of the vesting shares to cover the tax. You receive the net shares. This calculator shows how many shares are sold and how many you keep.

RSU vs Stock Options

RSUs grant actual shares at vest. You pay income tax on the FMV at vest. No exercise, no strike price. Common at public tech companies (Google, Meta, Microsoft, etc.).

Stock options (ISO, NSO) give you the right to buy shares at a strike price. Tax timing differs: ISOs can trigger AMT on exercise; NSOs are taxed as income when exercised. RSUs do not trigger AMT.

Sell-to-Cover Explained

When your RSUs vest, your employer must withhold taxes. Most use sell-to-cover: they sell a portion of your shares, send the proceeds to the IRS (and state), and deliver the remaining shares to your brokerage.

Shares sold = Tax withheld ÷ FMV per share. Example: 100 RSUs at $150, $6,000 tax = 40 shares sold, 60 shares received.

RSU Supplemental Withholding by State

State supplemental rates on RSU vesting. No-tax states withhold 0%; high-tax states withhold 10%+.

No-tax states: AK, FL, NV, NH, SD, TN, TX, WA, WY. Federal 22% + FICA (~29%) apply to all. Use the calculator for your exact numbers.
State	Supplemental rate	~Tax on $15,000 vest
California	10.23%	~$1,535
New York	6.85%	~$1,028
New Jersey	10.75%	~$1,613
Connecticut	6.99%	~$1,049
Texas	0%	$0
Florida	0%	$0
Washington	0%	$0
Nevada	0%	$0

Sell-to-Cover: Shares Sold vs Net Shares Received

Example: 100 RSUs vesting at different FMV. Tax withheld varies by state and other income.

Higher FMV = more gross value but similar share count sold (tax is roughly proportional). In no-tax states, fewer shares are sold. Enter your numbers above for exact results.
RSUs vesting	FMV/share	Gross value	~Tax withheld (CA)	~Shares sold	~Net shares
100	$100	$10,000	~$3,900	~39	~61
100	$150	$15,000	~$5,900	~39	~61
100	$200	$20,000	~$7,800	~39	~61
100	$300	$30,000	~$11,700	~39	~61

RSU vs Stock Options: Tax & Vesting Comparison

How equity types differ for tax and vesting

Use the calculator above for RSU vest tax. For stock options, see grant agreement and tax advisor. Equity Vesting Calculator models schedules for both.
Factor	RSUs	ISOs	NSOs
Tax timing	At vest (ordinary income)	At sale (if held 1yr+ after exercise)	At exercise (ordinary income)
AMT risk	No	Yes (exercise can trigger)	No
Strike price	N/A (grant shares)	Yes (exercise to buy)	Yes (exercise to buy)
Withholding at vest	Yes (22% fed + state + FICA)	N/A (no vest tax)	N/A (tax at exercise)
Sell-to-cover	Yes (common)	No	Possible at exercise

Example: Same RSU Vest in California vs Texas

100 RSUs @ $150 FMV, $150k other income, single filer

Same vest, same FMV—but California state tax means ~10 fewer shares received. Enter your state above for exact numbers.
Metric	California	Texas	Difference
Gross RSU value	$15,000	$15,000	$0
~Federal withholding	~$3,300	~$3,300	$0
~State withholding	~$1,535	$0	~$1,535 (CA higher)
~FICA	~$0 (over cap)	~$0 (over cap)	$0
~Total tax withheld	~$4,835	~$3,300	~$1,535 (CA higher)
~Net shares received	~68	~78	~10 (TX more)

RSU Tax Calculator by State

Use state-specific RSU tax calculator pages to estimate vesting tax for your state. Each page pre-fills your state and includes state tax rates.

Planning your full vesting schedule? Use our Equity Vesting Calculator to model 4-year schedules, cliffs, and acceleration. When a tranche vests, use this RSU Tax Calculator to estimate the tax on that specific vest event.