California RSU Tax Calculator 2026
See exactly how much your employer under-withholds on your RSU vest in California: the 10.23% state supplemental rate + 22% federal flat rate vs. your true marginal bracket.
After your company withholds 22%, you'll owe
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Set aside now
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✅ Pay this now to avoid an IRS penalty
Sell-to-cover ≠ paid in full
⚠ Don't get taxed twice when you sell
Owe a surprise bill?
RSU Taxes in California: What the Flat Rate Misses
California is the highest-tax state for RSU income in the country. The top marginal rate reaches 13.3% — the nation's highest — and kicks in at $1 million of taxable income for single filers. On top of that, California applies a supplemental withholding rate of 10.23% (the employer flat-rate used specifically for bonus and RSU income), plus SDI at 1.3% on all wages with no wage cap. If your total income exceeds $1 million, the 1% Mental Health Services Tax adds an additional layer. Because California does not allow the IRS's "22% flat" approach for state purposes, the 10.23% supplemental rate already approximates what you'd owe at the top — but for most employees still landing in the 9.3% or 10.3% bracket, the gap can run the other direction (you may be over-withheld at the state level and under-withheld federally). Use this calculator to see your precise California + federal combined liability.
The Federal Withholding Gap: 22% vs. Your Actual Bracket
Regardless of California's state tax rules, every RSU vest triggers a federal supplemental withholding event. The IRS mandates a flat 22% for supplemental wages up to $1 million (per employer, per year). Once cumulative supplemental wages from a single employer cross $1 million in a calendar year, the rate jumps to 37% on the excess. Most tech employees vesting $100k–$500k per year are in the 32% or 35% federal bracket by the time RSU income is counted — creating a gap of 10–15 percentage points that the flat 22% withholding misses entirely. On a $300,000 vest, that federal gap alone can exceed $39,000.
What to Do After Every Vest
The fix is straightforward but requires action before the next estimated tax deadline (typically April 15, June 15, September 15, or January 15). After every vest, run this calculator to compute your precise underpayment. Then make a direct payment to the IRS via IRS Direct Pay and to the California tax authority to cover the gap. Timing matters: the IRS safe-harbor rules generally require you to have paid 90% of the current year's liability, or 100% (or 110% for AGI over $150k) of last year's liability — whichever is smaller — through withholding or estimated payments.
For a deeper explanation of how the withholding gap works and a step-by-step guide to quarterly payments, see our RSU Withholding Gap guide. If you've already sold your RSU shares and your brokerage's 1099-B shows $0 cost basis, read our RSU Cost Basis Double-Tax guide before filing — it explains how to correct Form 8949 to avoid paying tax twice.
Sell-to-Cover: You Still Owe More
Most employers automatically sell a portion of your vesting shares to cover the mandatory withholding — a mechanism called "sell-to-cover" or "net settlement." This feels like the tax is handled, but it only satisfies the withheld amount (22% federal + 10.23% state). The remaining gap between what was withheld and what you truly owe at your marginal rate is still your responsibility. This calculator shows your sell-to-cover proceeds separately from the gap that remains after the sell, so you know exactly what you still need to pay.
Back to the RSU Tax Calculator home to compare other scenarios or try a different vest date or share price.
Frequently Asked Questions — California RSU Taxes
Why does my California employer withhold RSU taxes at a flat rate instead of my actual bracket?
Both the IRS and California allow employers to use a simplified flat "supplemental rate" rather than your personal bracket. For California, that supplemental rate is 10.23%. The federal rate is 22% (37% above $1 million). These flat rates are convenient for payroll systems but rarely match an individual employee's true marginal rate, creating a withholding gap.
Do I owe California taxes on RSUs if I no longer live there when I sell the shares?
California generally taxes RSU income based on where you lived and worked during the vesting period — not where you live when you sell. If you vested shares while a California resident and moved away before selling, California may still claim a portion of the vest income (and your new state may too). Keep records of your vest dates and state of residence for each grant tranche.
What is the cost basis for my RSU shares, and why does my 1099-B show $0?
Your cost basis for RSU shares is the fair market value (FMV) at vest — the same amount your employer already reported as ordinary income on your W-2. Brokerages are only required to report the adjusted basis to the IRS for shares acquired after 2011, and many report $0 or only the amount you paid (nothing, for RSUs). If you sell the shares and report the 1099-B proceeds against a $0 basis, you'll be taxed twice on the same income. On Form 8949, use Code B (basis not reported to IRS) and manually enter the FMV at vest as your cost basis. See our RSU Cost Basis Double-Tax guide for a step-by-step walkthrough.
How much should I set aside after each vest to cover my gap?
Run every vest through this calculator. The "Set Aside Now" number is the hero figure — it's the after-withholding gap you need to hold in cash or a money-market account until you pay your next quarterly estimated tax. A common rule of thumb: set aside an additional 10%–18% of vest FMV above what was withheld, depending on your combined California + federal marginal rate. The calculator shows you the exact number based on your actual income and filing status.
RSU Tax Calculators for Other States
Compare your California results with other states — especially if you're considering relocating before a large vest.