RSU Vesting Value Calculator

How do you calculate RSU vesting value?

Multiply the number of vesting shares by the current share price to get the gross value, then subtract estimated tax withholding (taxed as ordinary income at the vesting-date value) to get the after-tax value.

Gross Value = Shares Vesting × Share Price; After-Tax = Gross Value × (1 − Withholding Rate)

RSUs Are Taxed at Vesting, Not at Grant

Unlike stock options, Restricted Stock Units have no exercise price and no tax event at the grant date. The taxable event happens when the shares vest: the full fair market value of the vested shares on that date is treated as ordinary income, added to your W-2 wages, regardless of whether you sell the shares or continue holding them.

How Withholding Typically Works

Because RSU income is treated like a bonus for withholding purposes, employers often withhold taxes by automatically selling ("sell-to-cover") a portion of the vested shares to cover the estimated tax liability, delivering the remaining net shares to you. The statutory withholding rate can differ from your actual marginal tax rate, which sometimes creates an under- or over-withholding gap that shows up at tax filing time.

Cost Basis for Future Sales

The fair market value at vesting becomes your cost basis for the shares going forward. If you sell immediately at vesting, there's typically little to no additional capital gain or loss. If you hold the shares and the price moves, that difference from the vesting-date basis is taxed separately as a short- or long-term capital gain or loss when you eventually sell.

Concentration Risk

Since RSUs add company stock to your portfolio on top of your salary already depending on that same employer, many financial advisors recommend selling vested shares promptly to avoid excessive concentration risk, unless you have a specific reason to hold the position (tax planning, strong conviction, blackout period considerations).

Frequently Asked Questions (FAQ)

1. How are RSUs taxed when they vest?

RSUs are taxed as ordinary income at the fair market value of the shares on the vesting date, regardless of whether you sell them. Employers typically withhold taxes automatically, often by withholding a portion of the vested shares.

2. What is the difference between RSUs and stock options?

RSUs have value as soon as they vest, since you simply receive shares. Stock options only have value if the stock price is above the strike price, since you must pay the strike price to exercise them.

3. Do I owe taxes again when I sell vested RSU shares?

Yes, potentially. If the stock price changes between vesting and selling, that difference is taxed separately as a capital gain or loss, using the vesting-date value as your cost basis.

Estimate capital gains on a later sale with the Capital Gains Calculator, or check your overall tax bracket with the Tax Bracket Calculator.