Payroll taxes on your RSUs: the Social Security cap and the 0.9% Medicare surtax
On top of federal and state income tax, every RSU vest also gets hit with payroll taxes — Social Security and Medicare. Most people never think about them separately, but one of them contains a genuine saving that high earners routinely miss, and the other contains a small surprise.
Social Security: 6.2%, but only up to $184,500
Social Security tax (6.2% from you, 6.2% from your employer) applies only to the first $184,500 of your wages in 2026. After that, the rate on additional wages is 0%.
This is where vest timing matters. Say your salary is $200,000 and you have a $60,000 RSU vest in November. Your salary alone already cleared the $184,500 cap — so that entire vest owes $0 in Social Security tax. Someone with a $120,000 salary and the same vest would owe 6.2% on the full $60,000, or $3,720. Same vest, $3,720 difference, purely from where each person sat relative to the cap.
The RSU calculator on this site models the cap using your salary and year-to-date wages — which is exactly the input most free calculators skip.
Medicare: 1.45% on everything, no cap
Medicare's 1.45% has no wage limit. Every dollar of RSU income pays it, no matter how much you earn. Nothing to plan around — just know it's in the number.
The 0.9% Additional Medicare Tax
Once your total wages for the year pass $200,000 (single) or $250,000 (married filing jointly), an extra 0.9% Medicare tax applies to the wages above the threshold. A large vest can shove you over this line mid-year.
Here's the quirk: your employer is required to start withholding that extra 0.9% once your wages at that employer exceed $200,000 — regardless of your filing status. So if you're married filing jointly (threshold $250,000), you'll typically be slightly over-withheld on the 0.9% and get it back at filing. If you and a spouse each earn $180,000 at different jobs, neither employer withholds it, but your combined $360,000 means you owe it — slightly under-withheld. Either way it reconciles on your tax return; it's just worth knowing why the number moved.
Putting it together
For a high earner past the Social Security cap, the all-in payroll tax on a vest is just the 1.45% Medicare (+ 0.9% on the slice above the threshold). For someone well under the cap, it's the full 6.2% + 1.45% = 7.65% on top of income tax. That's a meaningful swing — and it's one more reason the "22% withholding" conversation understates the real math in both directions.