RSU & Bonus Withholding Gap Calculator
Example: RSU vest / bonus amount (gross): 50000 $ · Annual W-2 base salary (before RSU/bonus): 180000 $ · Filing status (0 = Single, 1 = Married Filing Jointly): 0
| Under-withheld amount (you owe this at filing) | $2,416 |
| Tax withheld at 22% flat rate | $11,000 |
| Actual federal tax on this income | $13,416 |
| Estimated quarterly payment to cover gap | $604 |
Worked example
A single filer with $180,000 in base salary receives a $50,000 RSU vest. The employer withholds $11,000 (22%). But at $180,000 base income, additional dollars fall into the 32% bracket — the RSU triggers about $16,000 in actual federal tax. The gap is $5,000. To avoid an underpayment penalty, this filer should make four quarterly payments of $1,250 each — or adjust W-4 withholding on base salary for the remainder of the year.
Frequently asked questions
Why does the IRS allow only 22% flat withholding on supplemental income?
The 22% flat rate (for supplemental wages under $1 million; 37% above that threshold) is an administrative simplification. Employers pay out bonuses as a separate payment that does not tie to your regular paycheck withholding, so the IRS sets a default rate. It is your responsibility to make up any shortfall.
Can I ask my employer to withhold more on RSUs?
In many cases, yes. Some employers allow you to elect a higher withholding rate on supplemental income via your W-4 or a separate RSU election form. Alternatively, you can increase regular paycheck withholding by filing a new W-4 with an additional flat dollar amount. Ask your payroll department about your options.
Do RSUs generate self-employment tax?
No. RSUs are W-2 compensation reported on your Form W-2 at vesting. They are subject to ordinary income tax and FICA (Social Security + Medicare), but not self-employment tax. The FICA is typically withheld at vesting.