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Updated July 28, 2026. Quick answer: Employers withhold a flat 22% on RSU vests up to $1,000,000 of supplemental wages (37% above). If your marginal rate is higher than 22%, the difference is a real shortfall that shows up at filing. This works out yours.
Your employer withholds a flat percentage on a vest. Your actual tax is your marginal rate. When those two numbers differ — and for most people holding RSUs they differ by a lot — the difference is a bill you have not been told about yet.
Why the flat rate is wrong for you specifically
Withholding on supplemental wages is set by regulation, not by your situation: 22% on the first $1,000,000 of supplemental wages in a year, 37% on anything above. It does not know your salary, your spouse’s income, or your other vests. It is a default.
The people who get hurt are the ones whose total income puts them well above 22% — which describes most people receiving meaningful RSU grants. The gap compounds across multiple vests in a year.
If that gap is real, it is due in April whether or not you planned for it.
Withholding is a flat 22% on the first $1,000,000 of supplemental wages in a year and 37% above that, and the safe harbor rises to 110% of last year’s tax once prior year AGI passes $150,000. Supplemental withholding is a flat default, not your bracket, and the shortfall is yours to cover. The advisers below pay to be introduced to people holding equity — ask them how they would cover it and what it costs to have someone watch it each year. It is free to you, and it is not the only way to find an adviser.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here — you stay on this page.
What happens when you press the button
It asks about nine questions — age, investable assets, location — then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
What to do about it
Three options, in rough order of how often they are the right one: make a quarterly estimated payment to close the gap; increase withholding on your salary via a revised W-4 so the shortfall is absorbed over the year; or accept the balance due and make sure you land inside a safe harbor so no penalty attaches.
The safe harbor is the part people miss. Under IRC §6654(d)(1)(B) you generally avoid an underpayment penalty if your withholding and estimates reach 90% of this year’s tax or 100% of last year’s — 110% if your prior-year AGI was over $150,000. Hitting the prior-year number is usually easier to compute and to guarantee.
Sources
Treas. Reg. §31.3402(g)-1(a)(7) (optional flat rate) and Treas. Reg. §31.3402(g)-1(a)(2) (mandatory flat rate above $1,000,000); IRC §6654(d)(1)(B), (C) (estimated tax safe harbors).
This states what the cited authority says. It is not tax advice, and equity compensation interacts with the rest of your return in ways a single page cannot see.