Estimated Taxes for RSU Earners: The Calendar That Keeps You Penalty-Free

Every April, a wave of tech workers discovers the same thing: the taxes withheld when their RSUs vested weren't the taxes they owed. The gap isn't a mistake — it's the predictable result of a flat 22% withholding rate meeting a progressive tax system. The good news: this is a calendar problem, not a math problem. Four dates, one simple calculation, and a safe harbor that forgives an imperfect estimate. Figures here are as of November 11, 2026, verified against IRS publications and announcements.

Why RSU earners owe estimated tax at all

The U.S. runs on pay-as-you-go, and RSU earners mostly pay through withholding — except the rate is wrong for them. Your employer withholds 22% federal tax on vest income (the IRS supplemental-wage rate), regardless of your bracket. In the 32% bracket, the IRS collected 22% and is still owed 10 points on every vested dollar.

The IRS requires estimated payments when you expect to owe $1,000 or more at filing time, after withholding and credits — a threshold most RSU earners clear with the first vest of the year. (The 22% withholding mechanics are covered in our companion piece on RSU tax withholding.)

The calendar: four dates, uneven quarters

Estimated tax is paid in four installments on the same dates every year — but the periods they cover are not equal quarters. The second "quarter" is only two months long.

A due date on a weekend or federal holiday moves to the next business day — that's why the last 2027 payment lands on Tuesday, January 18, 2028. And you can skip the January payment if you file your return and pay the full balance by February 1.

How much to pay: the gap calculation

Once a year, in January, estimate the gap between what will be withheld and what you'll actually owe:

Annual gap ≈ expected vest value × (your marginal federal rate − 22%)

Then divide by four and pay a quarter by each date. The Form 1040-ES worksheet gives the full version, folding in salary withholding, deductions, and credits — the shortcut above is usually close enough to land inside the safe harbor.

An illustrative example

The numbers below are a simplified illustration, not anyone's real situation. State taxes apply on top.

Say $150,000 of RSUs vests in a year, and your marginal federal bracket is 32%:

Run the same math for your state — in high-tax states the shortfall can be nearly as large as the federal one, and state schedules don't always mirror the federal dates. California, for example, wants 30% in April, 40% in June, nothing in September, and 30% in January.

The safe harbor: you don't have to be exact

The IRS doesn't require your estimate to be right — just close enough. The underpayment penalty is waived if your withholding plus timely estimated payments reach the smaller of:

• 90% of this year's total tax, or
• 100% of last year's total tax — 110% if your prior-year AGI was above $150,000 ($75,000 if married filing separately).

For most RSU earners with rising compensation, the 110%-of-last-year target is the practical one: take total tax off last year's return, multiply by 1.1, subtract what will be withheld from salary and vests, and divide by four. Hit it and there's no underpayment penalty, even if you still owe a balance when you file.

If your income is lumpy — a big vest in March, nothing in July — the IRS still measures each quarter separately by default. But Form 2210's annualized income installment method (Schedule AI) lets you pay in proportion to when the income actually arrived, which can shrink or eliminate penalties for earlier, lower-income quarters.

What underpaying actually costs

The underpayment penalty is interest, not a fine. It accrues separately for each quarter, from that quarter's due date until you pay or the following April 15, at the IRS underpayment rate — the federal short-term rate plus 3 points, reset quarterly. For the quarter beginning October 1, 2026 it's 7% per year, compounded daily (IR-2026-98); the 2026 rate was 7% in Q1, 6% in Q2, and 7% in Q3 and Q4.

Illustration: a $5,000 shortfall left unpaid from April 15, 2026 to April 15, 2027 costs roughly $350 in penalty interest at the 2026 rates — not ruinous, but entirely avoidable. The penalty is computed on Form 2210; if you don't file it, the IRS computes it and sends a bill.

How to pay

Three routes cover nearly everyone:

• IRS Direct Pay — free. Pay from a checking or savings account with no sign-in and no fee. Select "Estimated Tax," Form 1040-ES, and the correct tax year — the January payment is for the prior tax year, so pick 2026, not 2027.
• IRS Online Account — free. Same free bank-account payment, plus a payment history. Requires signing in through the IRS's identity partner.
• Card — costs a fee. Through IRS-authorized processors, a credit card costs 1.75% (Pay1040) or 1.85% (ACI Payments), with a $2.50 minimum; a debit card is a flat $2.10–$2.15 — about $66–$69 on a $3,750 quarterly payment. Only pay by card when the rewards genuinely beat the fee, and note card payments are capped at two per quarter for estimated tax.

EFTPS stopped accepting new individual enrollments in October 2025, so if you never enrolled, Direct Pay or your IRS Online Account is the way in. Keep the confirmation number from every payment — if one ever gets misapplied, that number is your proof.

Two tactics RSU earners overlook

Withholding counts as paid evenly all year. The IRS treats W-2 withholding as if it arrived in equal installments across all four quarters, whenever it was actually withheld — estimated payments are credited only in the quarter you make them. So if you discover a shortfall in November, raising salary withholding through your W-4 can cover earlier quarters retroactively, while a catch-up estimated payment cannot.

Automate the habit, not the amount. Set a recurring reminder one week before each due date with the amount you computed in January. When a vest lands, check whether the year's estimate still holds — a bigger vest than planned is the usual reason to top up the next installment. A budgeting app tracking vest deposits against your tax set-aside keeps the two from drifting apart. [AFFILIATE LINK: Monarch]

Make tax season boring

When the quarterly habit is in place, filing is mostly data entry: W-2, 1099s, and a return that already reflects the tax you paid during the year. Tax software handles the entries and the safe-harbor check.

[AFFILIATE LINK: TurboTax]

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The bottom line

Estimated tax is the IRS's way of saying pay as you earn, even when your employer's withholding doesn't keep up. For RSU earners the gap is predictable — vest value times the difference between your bracket and 22% — and the fix is four dates a year plus a safe harbor that forgives an imperfect estimate. Set the reminders once, pay a quarter of the gap each time, and April goes back to being just another month.