RSU Calculator

RSUs are taxed as ordinary income when they vest — not when granted. The FMV on vesting date is your taxable income.

Most tech companies use a 4-year vest with 1-year cliff: 25% vests after year 1, then monthly or quarterly for years 2–4.

Many advisors say yes — you're already concentrated in your employer's stock via salary. Diversifying makes sense for most people.

RSUs have value as long as the stock price is positive. Options are only valuable if stock rises above the strike price.

The cliff is the minimum time before any shares vest, typically one year. If you leave before the cliff, you receive zero shares. After the cliff, remaining shares vest on a regular schedule.

Multiply the number of shares granted by the current stock price. A grant of 500 shares at $150 per share is worth $75,000 at current market value, vesting over the schedule period.

Double taxation occurs when you pay income tax at vesting and then report the same cost basis on sale. Track your cost basis carefully as the vesting price to avoid paying tax twice on the same gain.

Many companies issue additional RSU grants annually to retain employees. These refreshers typically vest over 3 to 4 years and overlap with initial grants, creating a steady stream of vesting shares.

Default withholding is often 22 percent federal, which may be too low for high earners. Consider selling extra shares at vesting or making estimated tax payments to avoid a large tax bill in April.

Acquisition treatment varies by plan. RSUs may be converted to acquirer stock, cashed out at deal price, or accelerated to vest immediately. Review your grant agreement for change-of-control provisions.