When Restricted Stock Units vest and/or you exercise your Non Qualified stock options, your employer is likely to withhold value/shares from the transaction to cover your estimated taxes due. This is similar to paycheck withholdings to cover estimated taxes on your salary. Taxes are typically withheld at a Federal 22% tax rate (or 37% if it’s over $1 million in supplemental income) plus Social Security, Medicare, and state income tax, if applicable. To avoid facing an unpleasant surprise when you file your annual return, it’s important to work with a tax planner to ensure the withholding is sufficient, with no additional estimated taxes due.
