---
title: "RSU Tax Rate: How Much Tax Do You Really Owe on RSUs in 2025?"
slug: rsu-tax-rate
publishedAt: 2026-03-11T19:16:15.078Z
updatedAt: 2026-06-26T15:54:54.553Z
author: "Mike Navarro"
authorSlug: mike-navarro
category: "RSU Taxes"
tags: ["RSU", "Tax Rate", "Withholding", "Federal Tax", "State Tax"]
excerpt: "Your actual RSU tax rate is much higher than the 22% your employer withholds. Learn exactly how federal, state, and FICA taxes apply to your RSU vesting."
canonical: https://myequitytax.com/blog/rsu-tax-rate
---


<TaxYearBadge year={2025} />
<ReviewedBadge year={2025} />

Your RSU tax rate is not the 22% your employer withholds. Because RSUs are taxed as ordinary income, your real RSU tax rate is the sum of your federal marginal rate (up to 37%), state tax (0-13.3%), and Medicare — typically 40-55% for tech employees.

## What Is Your RSU Tax Rate?

RSUs are taxed as **ordinary income** when they vest, and the value is reported on your W-2 ([IRS Publication 525](https://www.irs.gov/publications/p525)). There is no special capital gains rate, no deferral, and no election to delay taxes. The moment shares land in your brokerage account, the IRS considers it income — identical to your salary.

Your RSU tax rate is the combination of:
- Federal income tax (10-37%)
- State income tax (0-13.3%)
- FICA taxes (Social Security + Medicare)

The total depends on your other income, filing status, and state. For the full picture of how RSUs are taxed across both vesting and selling, see our [complete guide to RSU taxation](/blog/how-are-rsus-taxed).

## Federal Tax Rate on RSUs

RSU income is added on top of your salary to determine your marginal federal rate. Here are the 2025 brackets for single filers (see the [complete 2026 federal tax brackets](/blog/2026-federal-tax-brackets) for all filing statuses):

| Taxable Income | Marginal Rate |
|----------------|--------------|
| $0 - $11,925 | 10% |
| $11,926 - $48,475 | 12% |
| $48,476 - $103,350 | 22% |
| $103,351 - $197,300 | 24% |
| $197,301 - $250,525 | 32% |
| $250,526 - $626,350 | 35% |
| Over $626,350 | 37% |

**Example:** You earn a $200,000 salary. Your RSUs vest and add $100,000. That $100K is taxed at your marginal rate — which starts at 32% and may push into 35%.

<Callout type="warning">
**The 22% withholding problem:** Your employer withholds a flat 22% on RSU income (or 37% on amounts over $1M) under the IRS supplemental wage rules ([IRS Publication 15](https://www.irs.gov/publications/p15)). If your marginal rate is 32-37%, you'll owe the difference when you file your tax return.
</Callout>

<PersonalizedCalculatorCTA equity="rsu" state="CA" postSlug="rsu-tax-rate" headline="What's your real RSU tax rate?" subcopy="22% withholding is not your tax rate. Enter your salary and vest to see your actual blended rate — the same numbers a tax pro would run. Free, about 60 seconds, no signup." buttonLabel="See my real rate" />

## State Tax Rate on RSUs

State tax varies dramatically and can be the largest surprise:

| State | Top Marginal Rate | Notes |
|-------|-------------------|-------|
| California | 13.3% | Plus 1% Mental Health Services Tax on income over $1M |
| New York | 10.9% | Plus NYC tax up to 3.876% for city residents |
| Washington | 0% | No state income tax |
| Texas | 0% | No state income tax |
| Massachusetts | 5% | Flat rate + 4% surtax on income over $1M |
| New Jersey | 10.75% | Top bracket |

<Callout type="info">
**California's Mental Health Services Tax:** If your total taxable income (salary + RSUs) exceeds $1M, California adds a 1% surcharge on every dollar above $1M ([California FTB: stock options](https://www.ftb.ca.gov/file/personal/income-types/stock-options.html)). This pushes the effective state rate to 14.3% for high earners.
</Callout>

The chart below shows how the same RSU vest lands very differently depending on where you live. If you vest in a high-tax state, it's worth reading a state-specific breakdown — for example, our guides on [how New York taxes and withholds on RSU vesting](/blog/ny-rsu-vesting-tax) and [Massachusetts RSU vesting and its millionaire surtax](/blog/ma-rsu-vesting-tax) walk through the local withholding mechanics in detail.

<StateTaxComparisonChart />

**Deep dives by state:** [California Income Tax Guide](/blog/california-income-tax) | [New York Income Tax Guide](/blog/new-york-income-tax) | [Texas Income Tax Guide](/blog/texas-income-tax) | [Washington Income Tax Guide](/blog/washington-income-tax) | [Full State Tax Comparison](/blog/state-income-tax-guide)

## FICA Taxes on RSUs

RSU income is subject to Medicare taxes. Social Security depends on whether you've hit the wage base:

- **Social Security:** 6.2% on income up to $176,100 (2025). Most tech employees hit this from salary alone, so RSUs often aren't subject to SS.
- **Medicare:** 1.45% on all income, no cap
- **Additional Medicare Tax:** 0.9% on income over $200,000 (single) / $250,000 (married)

For a single filer earning $200K+ salary, FICA on RSUs is typically just 2.35% (Medicare + Additional Medicare).

## Why 22% Withholding Is Not Your RSU Tax Rate

This is the core problem. Your employer withholds 22% federal on RSU income (the "supplemental income" rate). But your actual marginal rate is likely 32-37%.

**Example: $200K salary + $100K RSU in California**

| Tax Component | Withheld | Actual Owed | Shortfall |
|---------------|----------|-------------|-----------|
| Federal | $22,000 (22%) | $33,000 (33% effective) | $11,000 |
| California | $10,230 (10.23%) | $11,500 (11.5% marginal) | $1,270 |
| Medicare | $2,350 (2.35%) | $2,350 (2.35%) | $0 |
| **Total** | **$34,580** | **$46,850** | **$12,270** |

You owe an additional **$12,270** when you file. Without planning, this becomes an unpleasant April surprise.

<WithholdingGapChart defaultWithholding={34580} actualTax={46850} shortfall={12270} />

<CalculatorCTA calculatorType="rsu" />

## Worked Example: $150K Salary + $50K RSU (California)

Here's a more accessible example showing the full tax walkthrough at a lower income level.

**Federal tax (incremental method, single filer, 2025):**
- Total W-2 income: $200,000 ($150K salary + $50K RSU)
- Standard deduction: $15,750
- Taxable income: $184,250
- Federal tax on $200K total: ~$34,300
- Federal tax on $150K salary alone: ~$24,500
- **RSU-attributable federal tax: ~$9,800**
- Federal withheld at 22%: $11,000
- Federal result: **over-withheld by ~$1,200** (the 22% rate slightly exceeds the 24% marginal because the first portion of RSU income fills up the remaining 22% bracket)

**California state tax (incremental method):**
- CA tax on $200K total: ~$10,800
- CA tax on $150K salary alone: ~$6,150
- **RSU-attributable CA tax: ~$4,650** (effective 9.3% marginal)
- CA withheld at 10.23%: $5,115
- CA result: **over-withheld by ~$465**

**Medicare:**
- Medicare on RSU: $50,000 × 1.45% = $725
- Additional Medicare: $0 (income under $200K threshold with RSU)
- Medicare withheld: $725
- Medicare result: **exact match**

**Total shortfall: ~$0 to small refund** at this income level. The 22% federal supplemental rate actually covers the 24% marginal rate because the first ~$3K of RSU income is still taxed at 22%. However, as income rises, the shortfall grows rapidly — see the table below.

<Callout type="info">
**Why the math surprises people:** At $150K salary + $50K RSU, the withholding roughly matches actual tax. But at $200K+ salary, the RSU pushes you into the 32% bracket, and the 22% withholding rate falls dramatically short. The shortfall scales with income — it's not a flat gap.
</Callout>

## RSU Tax Rate by Income Level

Here's what your effective RSU tax rate looks like at different income levels (single filer, California):

| Salary | RSU Value | Effective RSU Tax Rate | Withholding Shortfall |
|--------|-----------|----------------------|----------------------|
| $150,000 | $50,000 | ~42% | ~$4,800 |
| $200,000 | $100,000 | ~47% | ~$12,200 |
| $300,000 | $150,000 | ~50% | ~$19,500 |
| $500,000 | $200,000 | ~53% | ~$28,000 |

For Washington or Texas residents, subtract 10-13% since there's no state income tax. Flat-rate states sit in between: if you're in a state like Colorado or Pennsylvania, the math is more predictable, but the withholding gap still bites — see [how Colorado handles RSU vesting and withholding](/blog/co-rsu-vesting-tax) and [the Pennsylvania flat-rate approach to RSU income](/blog/pa-rsu-vesting-tax) for the state-level details.

<RSUTaxRateChart />

## How to Plan for the RSU Tax Gap

### 1. Adjust Your W-4
Add extra withholding on your regular paychecks to pre-pay the expected shortfall. On Form W-4, Step 4(c), enter the additional dollar amount per paycheck.

**Example:** You estimate a $12,200 annual shortfall ($200K salary + $100K RSU in California). You have 24 semi-monthly pay periods remaining. Enter **$508** on Line 4(c) — that's $508 × 24 = $12,192 in additional withholding, nearly covering the gap. The advantage of W-4 over estimated payments: paycheck withholding is treated as if paid evenly throughout the year, avoiding underpayment penalties for earlier quarters.

### 2. Make Estimated Tax Payments
Pay quarterly estimates (Form 1040-ES) after large vesting events. This avoids the underpayment penalty (approximately 7-8% annually in 2026 per IRC Section 6654), which is computed on [IRS Form 2210](https://www.irs.gov/forms-pubs/about-form-2210).

**Example ($12,200 shortfall spread quarterly):**

| Quarter | Due Date | Payment |
|---------|----------|---------|
| Q1 | April 15, 2026 | $3,050 |
| Q2 | June 16, 2026 | $3,050 |
| Q3 | September 15, 2026 | $3,050 |
| Q4 | January 15, 2027 | $3,050 |

For a complete walkthrough of estimated tax payments on RSU income, including safe harbor rules, see our [estimated tax guide for RSU income](/blog/estimated-taxes-on-rsu-income).

### 3. Sell-to-Cover at the Right Rate
If your broker (Schwab, E*Trade, Morgan Stanley) lets you specify a sell-to-cover percentage, set it to your actual marginal rate instead of the default 22%. (For the full mechanics, see our [RSU sell to cover guide](/blog/rsu-sell-to-cover).)

| State | Recommended Sell-to-Cover % |
|-------|---------------------------|
| California | 50-52% |
| New York (NYC) | 50-53% |
| Massachusetts | 45-48% |
| Texas / Washington | 38-40% |

This eliminates the shortfall entirely — you just keep fewer shares at vesting.

### 4. Set Aside Cash from Each Vest
A simple rule: set aside **50%** of each RSU vest if you're in California or New York, or **40%** if you're in a no-income-tax state (Texas, Washington, Florida). Anything leftover is a bonus. For a $50K quarterly vest in California, that means setting aside $25,000 — more than your broker's sell-to-cover amount, but the surplus protects you from any April surprise.

## Calculate Your Exact RSU Tax Rate

Your situation is unique — your salary, RSU amount, state, filing status, and deductions all affect the final number. Our [RSU Calculator](/calculator/rsu) computes your exact shortfall using the incremental tax method described in this guide.

<CalculatorCTA calculatorType="rsu" />

## Frequently Asked Questions

**What is my RSU tax rate?**
Your RSU tax rate is the combination of your federal marginal rate (22-37%), state income tax (0-13.3%), and Medicare taxes (2.35%). For most tech employees, the total effective rate on RSU income is 40-55% depending on salary level and state of residence. Use our RSU Calculator to find your exact rate.

**Is the RSU tax rate 22% or higher?**
The 22% rate is only the federal withholding rate for supplemental income — it is not your actual tax rate. Your employer is required to withhold at this flat rate regardless of your tax bracket. If your total income exceeds $197,300 (single), your marginal federal rate alone is 32-37%, making 22% withholding insufficient.

**Do RSUs push me into a higher tax bracket?**
Yes, RSU income stacks on top of your salary and pushes your total income into higher brackets. However, only the dollars in the higher bracket are taxed at the higher rate — your entire income is not retroactively taxed at the new rate. This is the marginal vs effective tax rate distinction.

**Are RSUs taxed differently than salary?**
RSUs are taxed at the same ordinary income rates as salary. The difference is in withholding: salary withholding uses your W-4 elections (which account for your full tax picture), while RSU withholding uses the flat 22% supplemental rate. This withholding gap is why RSU holders often owe additional tax at filing time.

**What is the RSU tax rate in California?**
In California, your RSU tax rate combines federal marginal tax (32-37% for most tech workers), California state tax (9.3-13.3% marginal), and Medicare (2.35%) — totaling 43-53%. If your total taxable income exceeds $1M, California adds a 1% Mental Health Services Tax surcharge, pushing the combined rate above 55%.

<TaxDisclaimer />