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RSU withholding gap
Supplemental wages — an RSU vest, a bonus — are withheld at a flat rate. Above roughly $200,000 of income that flat rate is below your marginal rate, and the shortfall is yours to pay.
Shortfall at filing——
What this does and does not model
- Federal withholding only: state withholding on supplemental wages is set state by state and is not modelled.
- The flat rate is 22% up to $1 million of supplemental wages in a year and 37% above it.
- The actual cost is the difference between your federal tax with and without the vest, including the extra Medicare tax.
- Wages and long-term gains only. Business income, rental income, foreign income and the qualified business income deduction are not modelled.
- The standard deduction is applied. Itemised deductions, the SALT cap and its phase-down, and the senior deduction are not.
- The alternative minimum tax is not calculated; at high option income it can exceed the figure shown.
- Payroll tax is the employee half only. Pre-tax retirement contributions reduce income tax but not Social Security or Medicare tax.
- State tax starts from federal adjusted gross income less the state standard deduction and personal exemption. Local income taxes, state credits and state-specific adjustments are not modelled.
Where the numbers come from
- Federal rate schedules, capital-gains thresholds and the standard deduction: Rev. Proc. 2025-32, tax year 2026.
- Social Security wage base and Medicare thresholds: our limits table, checked against the IRS and SSA.
- State rate schedules: Tax Foundation, 2026, cross-checked against our state map.
Statutory rate schedules for single and joint filers from the Tax Foundation 2026 table. Local income taxes, payroll taxes, state credits beyond the personal exemption credit, and state-specific add-backs are not modelled; where the Foundation notes 2026 brackets were not yet published, 2025 bracket widths apply.
Tax year 2026. General information, not tax, legal or investment advice.