Quick Answer
RSU or STOCK on your pay stub represents restricted stock units that vested during the pay period. When RSUs vest, their full market value becomes taxable income, typically withholding 22% federal taxes plus state taxes. For example, if $10,000 worth of stock vests, expect roughly $2,200-3,500 in additional taxes withheld.
Best Answer
Sarah Chen, Payroll Tax Analyst
Traditional employees receiving RSUs as part of their compensation package
What RSU or STOCK means on your pay stub
RSU (Restricted Stock Units) or STOCK on your pay stub represents company stock that has vested during that pay period. When RSUs vest, you officially own the shares and their full market value becomes taxable income, just like your regular salary.
The key point: RSUs are taxed at vesting, not when you sell the stock. If 100 shares vest at $50 per share ($5,000 total value), that entire $5,000 gets added to your taxable income for the year.
Example: $5,000 RSU vesting on your paycheck
Let's say you're in the 22% federal tax bracket with a 5% state tax rate:
RSU vesting value: $5,000
Federal withholding (22%): $1,100
State withholding (5%): $250
FICA taxes (7.65%): $383
Total taxes withheld: $1,733
Net cash from RSUs: $3,267
Your pay stub will show the $5,000 as taxable income under 'RSU' or 'STOCK,' and you'll see the corresponding tax withholdings reduce your take-home pay.
How RSU taxation works on your pay stub
Pay stub line items you'll see
Key factors that affect RSU taxation
What you should do
Check your RSU vesting schedule and plan for the tax impact. Large vesting events can significantly reduce your take-home pay due to withholding. Use our paystub explainer tool to understand exactly how your RSUs affect each paycheck.
Key takeaway: RSUs become taxable income when they vest, typically withholding 22% federal plus state taxes. A $10,000 RSU vesting will reduce your take-home pay by roughly $2,200-3,500 in tax withholding.
*Sources: [IRS Publication 15-T](https://www.irs.gov/pub/irs-pdf/p15t.pdf)*
Key Takeaway: RSUs become taxable income when they vest, with typical withholding of 22% federal plus state taxes reducing your take-home pay significantly.
RSU tax withholding by income level
| Income Level | RSU Value | Federal Withholding | Likely Additional Tax Owed |
|---|---|---|---|
| $75K salary | $5,000 RSU | $1,100 (22%) | $0 (may get refund) |
| $120K salary | $10,000 RSU | $2,200 (22%) | $200+ (24% bracket) |
| $180K salary | $15,000 RSU | $3,300 (22%) | $600+ (32% bracket + Medicare) |
More Perspectives
Marcus Rivera, Compensation & Benefits Analyst
High-income employees with substantial RSU grants who face additional tax considerations
RSU complexity for high earners
As a high earner, your RSU taxation gets more complex. The standard 22% federal withholding rate often under-withholds, leaving you with a tax bill at year-end.
Example: $150K salary + $20K RSU vesting
If you earn $150,000 salary and $20,000 in RSUs vest:
Additional considerations for high earners
Strategic planning
Consider sell-to-cover strategies where you immediately sell enough shares to cover the tax withholding, or adjust your W-4 to increase withholding from your regular salary to compensate for RSU under-withholding.
Key takeaway: High earners often face under-withholding on RSUs due to the 22% supplemental rate being below their actual marginal tax rate, potentially requiring estimated tax payments.
Key Takeaway: High earners often face under-withholding on RSUs, with the 22% supplemental rate being below their actual marginal tax rate of 24%+ plus additional Medicare taxes.
Sources
- IRS Publication 15-T — Federal Income Tax Withholding Methods
Related Questions
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.