Restricted Stock Calculator

Restricted Stock Vesting Calculator

Use this calculator to estimate the net shares and value you will receive from your Restricted Stock Units (RSUs) or Restricted Stock Awards (RSAs) after taxes are withheld upon vesting. This tool helps you understand the impact of various tax rates on your equity compensation.

function calculateRestrictedStock() { var totalSharesGranted = parseFloat(document.getElementById('totalSharesGranted').value); var currentStockPrice = parseFloat(document.getElementById('currentStockPrice').value); var vestingPercentage = parseFloat(document.getElementById('vestingPercentage').value); var federalTaxRate = parseFloat(document.getElementById('federalTaxRate').value); var stateTaxRate = parseFloat(document.getElementById('stateTaxRate').value); var ficaTaxRate = parseFloat(document.getElementById('ficaTaxRate').value); if (isNaN(totalSharesGranted) || isNaN(currentStockPrice) || isNaN(vestingPercentage) || isNaN(federalTaxRate) || isNaN(stateTaxRate) || isNaN(ficaTaxRate) || totalSharesGranted < 0 || currentStockPrice < 0 || vestingPercentage 100 || federalTaxRate 100 || stateTaxRate 100 || ficaTaxRate 100) { document.getElementById('restrictedStockResult').innerHTML = 'Please enter valid positive numbers for all fields. Percentages must be between 0 and 100.'; return; } var sharesVesting = totalSharesGranted * (vestingPercentage / 100); var grossVestingValue = sharesVesting * currentStockPrice; var federalTaxAmount = grossVestingValue * (federalTaxRate / 100); var stateTaxAmount = grossVestingValue * (stateTaxRate / 100); var ficaTaxAmount = grossVestingValue * (ficaTaxRate / 100); var totalTaxesWithheld = federalTaxAmount + stateTaxAmount + ficaTaxAmount; var sharesWithheldForTaxes = 0; if (currentStockPrice > 0) { // Avoid division by zero sharesWithheldForTaxes = totalTaxesWithheld / currentStockPrice; } var netSharesReceived = sharesVesting – sharesWithheldForTaxes; var netCashValueAfterTaxes = grossVestingValue – totalTaxesWithheld; var resultHTML = '

Vesting Summary:

'; resultHTML += 'Shares Vesting: ' + sharesVesting.toFixed(2) + ' shares'; resultHTML += 'Gross Vesting Value: $' + grossVestingValue.toFixed(2) + "; resultHTML += '

Tax Breakdown:

'; resultHTML += 'Federal Income Tax Withheld: $' + federalTaxAmount.toFixed(2) + "; resultHTML += 'State Income Tax Withheld: $' + stateTaxAmount.toFixed(2) + "; resultHTML += 'FICA Tax Withheld: $' + ficaTaxAmount.toFixed(2) + "; resultHTML += 'Total Taxes Withheld: $' + totalTaxesWithheld.toFixed(2) + "; resultHTML += '

Net Results:

'; resultHTML += 'Shares Withheld for Taxes: ' + sharesWithheldForTaxes.toFixed(2) + ' shares'; resultHTML += 'Net Shares Received: ' + netSharesReceived.toFixed(2) + ' shares'; resultHTML += 'Net Cash Value (if sold immediately): $' + netCashValueAfterTaxes.toFixed(2) + "; document.getElementById('restrictedStockResult').innerHTML = resultHTML; } .restricted-stock-calculator { font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif; background-color: #f9f9f9; border: 1px solid #ddd; padding: 20px; border-radius: 8px; max-width: 600px; margin: 20px auto; box-shadow: 0 2px 4px rgba(0, 0, 0, 0.1); } .restricted-stock-calculator h2 { color: #333; text-align: center; margin-bottom: 20px; } .restricted-stock-calculator p { color: #555; line-height: 1.6; } .calculator-inputs label { display: block; margin-bottom: 5px; color: #333; font-weight: bold; } .calculator-inputs input[type="number"] { width: calc(100% – 22px); padding: 10px; margin-bottom: 15px; border: 1px solid #ccc; border-radius: 4px; box-sizing: border-box; } .calculator-inputs button { background-color: #007bff; color: white; padding: 12px 20px; border: none; border-radius: 4px; cursor: pointer; font-size: 16px; width: 100%; box-sizing: border-box; transition: background-color 0.3s ease; } .calculator-inputs button:hover { background-color: #0056b3; } .calculator-results { margin-top: 25px; padding: 15px; background-color: #e9f7ef; border: 1px solid #d4edda; border-radius: 8px; color: #155724; } .calculator-results h3, .calculator-results h4 { color: #0056b3; margin-top: 10px; margin-bottom: 10px; } .calculator-results p { margin-bottom: 8px; } .calculator-results p strong { color: #333; }

Understanding Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs)

Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs) are forms of equity compensation offered by companies to their employees. They represent a promise to deliver company shares or their cash equivalent once certain vesting conditions are met, typically based on continued employment over a period of time (e.g., 4 years with a 25% annual vest).

How Restricted Stock Works

1. Grant: An employee is granted a certain number of RSUs or RSAs. At this point, they don't own the shares.
2. Vesting: Over a specified schedule, a portion of the granted shares "vest." This means the employee gains ownership of those shares.
3. Taxation at Vesting: Upon vesting, the fair market value (FMV) of the shares is considered ordinary income and is subject to federal, state, and FICA (Social Security and Medicare) taxes. For RSUs, this is the most common taxation event. For RSAs, an employee might elect to be taxed at grant via an 83(b) election, but without that, taxation also occurs at vesting.
4. Tax Withholding ("Sell to Cover"): To cover the tax liability, companies typically withhold a portion of the vested shares. This is often referred to as a "sell to cover" transaction, where enough shares are sold on the open market to pay the required taxes, and the remaining net shares are then delivered to the employee's brokerage account.

Using the Restricted Stock Vesting Calculator

This calculator helps you estimate the number of shares you will actually receive and their net value after taxes are withheld. Here's what each input means:

• Total Shares Granted: The total number of RSUs or RSAs initially granted to you.
• Current Stock Price ($): The estimated fair market value per share at the time of vesting. This is a crucial input as it directly impacts the gross value and tax liability.
• Vesting Percentage (%): The percentage of your total granted shares that are vesting at a specific event. For example, if 25% of your shares vest annually, you would enter '25'.
• Federal Income Tax Rate (%): Your estimated marginal federal income tax rate. This can vary based on your total income.
• State Income Tax Rate (%): Your estimated marginal state income tax rate. This varies by state and income level.
• FICA Tax Rate (%): The combined Social Security (6.2%) and Medicare (1.45%) tax rate, totaling 7.65%. Note that Social Security tax has an annual wage base limit, but for simplicity, this calculator applies it to the full vesting value.

Example Scenario:

Let's say you were granted 1,000 shares. On your first vesting date, 25% of these shares vest. The company's stock price on that day is $150 per share. Your estimated federal tax rate is 24%, state tax rate is 5%, and FICA is 7.65%.

• Shares Vesting: 1,000 shares * 25% = 250 shares
• Gross Vesting Value: 250 shares * $150/share = $37,500
• Federal Tax Withheld: $37,500 * 24% = $9,000
• State Tax Withheld: $37,500 * 5% = $1,875
• FICA Tax Withheld: $37,500 * 7.65% = $2,868.75
• Total Taxes Withheld: $9,000 + $1,875 + $2,868.75 = $13,743.75
• Shares Withheld for Taxes: $13,743.75 / $150/share = 91.625 shares
• Net Shares Received: 250 shares – 91.625 shares = 158.375 shares
• Net Cash Value (if sold immediately): $37,500 – $13,743.75 = $23,756.25

This example demonstrates how a significant portion of your vested shares are used to cover tax obligations, resulting in fewer net shares than initially vested.

Disclaimer: This calculator provides estimates for informational purposes only and should not be considered tax or financial advice. Tax laws are complex and can change. Please consult with a qualified financial advisor or tax professional for personalized advice regarding your specific situation.