--- title: "How Are RSUs Taxed? Vesting, Withholding, Selling (2026) | TaxWren" description: "RSUs are taxed as wages when shares are delivered, with withholding that can be a flat 22%, then as capital gains when sold. An example and the cost basis trap." url: https://taxwren.com/blog/how-are-rsus-taxed --- [Investing](/blog#investing) · Explainer # How are RSUs taxed? Vesting, withholding and selling RSUs are taxed as wages when shares are delivered, with withholding that can be a flat 22%, then as capital gains when sold. An example and the cost basis trap. By the TaxWren team · Updated October 10, 2026 · 3 min read ## Key takeaways - When RSUs vest and the shares are delivered, their market value is wages: it goes on your W-2 with income tax, Social Security and Medicare. - If your employer withholds at the flat supplemental rate, that is 22% federal (37% above $1,000,000), which can be less than your real bracket. - The value you were taxed on becomes your cost basis. When you sell, only the change since vesting is a capital gain or loss. - Check the basis on Form 1099-B: if it leaves out the vesting value, you could pay tax on the same income twice. Restricted stock units are taxed twice, at two different moments. When they vest and the shares are delivered, their value is pay, taxed like salary. When you later sell the shares, only the price change since vesting is taxed, as a capital gain or loss. Most RSU tax surprises come from the gap between what is withheld at vesting and what you really owe, and from a cost basis that is reported wrong. ## When are RSUs taxed? Not when they are granted, and not while they are unvested. When an RSU vests and the company delivers the shares, the shares are taxable income and count as wages: the market value of the shares on that date goes on your W-2 and is subject to federal income tax withholding, Social Security and Medicare, even though you were paid in stock rather than cash. Depending on the plan, the withholding is paid by holding back some of the shares or selling some for you. ## How much tax is withheld when RSUs vest? If your employer withholds at the flat supplemental rate, federal withholding is 22% of the vesting value (37% on supplemental wages above $1,000,000 in a year), plus Social Security, Medicare and any state tax. That flat rate can be below your real bracket. 100 shares vest at $150, with a $150,000 salary The vesting adds $15,000 of wages. At 22%, $3,300 of federal tax is withheld, plus $930 of Social Security and $218 of Medicare. But at this income the extra wages fall in the 24% bracket, so they really add $3,600 of federal tax: about $300 more is due when you file. The [bonus tax calculator](/bonus-tax-calculator) works the same way for any vesting: enter the vesting value as the bonus. ## What happens when I sell RSU shares? The value you were taxed on at vesting becomes your cost basis. When you sell, the gain or loss is the sale price minus that basis, and the holding period starts when you received the shares. - **Sell right at vesting:** the price has barely moved, so there is little or no gain. All the tax was the wage tax. - **Sell after more than a year:** the change since vesting is a long-term gain. In the example, selling at $180 gives a $3,000 gain and about $450 of federal tax. - **Sell within a year:** the same gain is short-term and taxed at ordinary rates: about $720. Estimate a sale with the [capital gains tax calculator](/capital-gains-tax-calculator), using the vesting value as your cost basis. ## Watch the cost basis on your 1099-B Do not pay tax on the same income twice The vesting income was already taxed through your W-2. If the cost basis on your Form 1099-B leaves it out and you file with a zero basis, the whole $18,000 sale looks like a gain: about $2,700 of federal tax instead of $450. Use the vesting value as your basis and record the correction in column (g) of Form 8949. ## Do RSUs trigger the wash-sale rule? They can. If you sell company shares at a loss and, within 30 days before or after the sale, you receive substantially identical shares, for example from another RSU vesting, the loss is a wash sale. You cannot deduct it then; it is added to the basis of the new shares instead. IRS Publication 550 gives exactly this example for stock received as a bonus award. ## What about private companies? Employees of some private companies can elect under section 83(i) to defer income tax on qualified RSU stock for up to five years after vesting, if the company has a written plan that offers RSUs or options to at least 80% of its US employees. Owners of 1% or more, the CEO and CFO, their family members and the four highest-paid officers are excluded. Ask your employer whether its plan qualifies. ## Sources 1. IRS Office of Chief Counsel: [Memorandum 202327014: RSU income and FICA](https://www.irs.gov/pub/irs-wd/202327014.pdf) (official) 2. IRS: [Publication 551, Basis of Assets (property received for services)](https://www.irs.gov/publications/p551) (official) 3. IRS: [Publication 550, Investment Income and Expenses (wash sales)](https://www.irs.gov/publications/p550) (official) Figures come from the data files behind our calculators and update with them. See our [methodology](/methodology) and [editorial policy](/editorial-policy). This article is general information, not tax advice. ## Frequently asked questions ### When are RSUs taxed? When they vest and the shares are paid to you. The value of the shares at that time is wages, reported on your W-2 and subject to income tax, Social Security and Medicare. Unvested RSUs are not taxed. ### Why do I owe tax on RSUs even though my employer withheld shares? Shares withheld for tax at a flat 22% may not cover your real tax if your top bracket is higher, or if state tax applies. The difference is due when you file. ### What is the cost basis of RSU shares? The value you included in income when they vested, which is normally the share price at vesting times the number of shares you received. Your capital gain or loss when you sell is the sale price minus that basis. ### Do RSUs count for the wash-sale rule? They can. If you sell company shares at a loss and receive substantially identical shares, for example another RSU vesting, within 30 days before or after the sale, the loss can be disallowed and added to the basis of the new shares. ## Run your own numbers - [Capital gains tax calculator](/capital-gains-tax-calculator) Tax on selling stocks, crypto, property or a home, and on dividends: 0/15/20% long-term and qualified dividend rates, short-term rates, 3.8% NIIT, state tax and the main home exclusion. - [Bonus tax calculator](/bonus-tax-calculator) Bonus check after the 22% federal flat withholding, FICA and state tax, and what the bonus really costs at year end. - [Take-home pay calculator](/take-home-pay-calculator) Gross to net salary after federal, FICA, state and local taxes. ## More on investing - [Tax-loss harvesting: how it works and what it saves](/blog/tax-loss-harvesting)