Your Q4 RSUs Were Withheld at 22%. Your Real Rate Probably Isn't.

Your employer withheld federal tax on that Q4 vest at the 22% supplemental rate (IRS Publication 15, 2026), but a San Diego high earner often sits in the 35% or 37% bracket (IRS Rev. Proc. 2025-32). That gap is real under-withholding. Two levers close it before the January 15, 2027 estimated-tax deadline.

The 22% is a default, not a calculation

Payroll doesn’t know your full year. When an RSU lot vests, your employer withholds federal tax on it at a flat supplemental rate. “The withholding rate on supplemental wages remains 22%,” per IRS Publication 15 (2026). That 22% is the same whether the vest lands on top of a $180,000 salary or a $600,000 one.

Your bracket isn’t the same. A single filer crosses into the 35% bracket at $256,225 of taxable income and the 37% bracket at $640,600 for 2026 (IRS Rev. Proc. 2025-32). Every RSU dollar stacks on top of your wages, so it gets taxed at your top marginal rate, and 22% came up short the moment the lot vested.

Keep in mind the shortfall is wider than the raw rate gap looks once two other things get added.

California, and the 3.8% that hides in a big year

California runs its own flat withholding on stock and bonuses, 10.23% (CA EDD, DE 231PS, 2026). That is a withholding rate, not your California tax, so a top-bracket year can leave the state side short too.

A large wage year doesn’t trigger the net investment income tax by itself, because RSU vest income is wages, not investment income. But it lifts your MAGI, and the 3.8% net investment income tax lands on investment income once MAGI tops $200,000 single or $250,000 married filing jointly (IRS Topic No. 559, 2026). That threshold is not indexed to inflation, so more earners cross it every year without doing anything differently.

Two levers, and the calendar picks which one

There are two ways to make up the shortfall before the IRS expects it. One is to raise the tax coming out of your remaining paychecks by updating your W-4. Two is to send a Q4 estimated payment on your own.

Which one is workable depends on the date you act.

Earlier in the year, the W-4 bump is the cleaner lever. Withholding gets treated as paid evenly across the whole year, even the dollars added in December, so a bump can cover a shortfall that happened back in the spring.

Later in the year, that same bump has fewer paychecks left to come out of. The dollars you’re short don’t change, but now they’re crammed into two or three checks instead of twenty, so take-home drops hard right as holiday spending shows up. At that point the estimated payment is usually the more workable lever. You send one payment and keep your paycheck whole. The trade-off is that it takes cash on hand in January, which the W-4 route spreads out for you.

Sources: IRS Publication 15 (2026), IRS Form 1040-ES (2026), and the payment-crediting rule under 26 U.S.C. §6654.

The deadline is a real one, and here’s where it comes from

The Q4 estimated payment for 2026 is due January 15, 2027. That date comes straight off IRS Form 1040-ES (2026), which lists the fourth payment as due January 15, 2027. The IRS lays out the quarterly structure in its guidance on estimated taxes.

One wrinkle sits in that same form. You can skip the January 15 payment if you file your 2026 return and pay the balance in full by February 1, 2027. Just a thought for anyone who files early.

The reason the date carries weight is the underpayment penalty. You avoid it by hitting a safe harbor: 90% of your 2026 tax, or 110% of your 2025 tax when your 2025 AGI topped $150,000 (26 U.S.C. §6654(d)(1)). Which of those two is the cheaper target to reach is worth confirming with your CPA before you size the payment, because overshooting just parks your cash with the IRS until spring.

Where this usually bites

The gap tends to catch the people least able to see it coming, the ones whose RSU income swamps their salary in a single quarter. Picture a composite case, a tech employee holding roughly $600,000 in appreciated RSUs, about 30% of everything she owns. The thing holding her back from trimming the position isn’t the market, it’s the tax drag on selling. The withholding gap and the concentration question are two separate planning topics, and this post is only the first. The second is covered in RSU vesting: to hold or to fold.

Both of these live inside the wider picture for high earners who aren’t rich yet, which is laid out in the San Diego HENRY strategy.

If you want a second set of eyes on where your 2026 numbers actually land before January, that is what a complimentary review walks through.

What’s your 2025 AGI, and do you know which safe harbor you’re closer to?

Does the 22% withholding mean I only owe 22% on my RSUs?

No. The 22% is a payroll default for supplemental wages (IRS Publication 15, 2026), not a calculation of your rate. Your RSU income stacks on top of your salary and is taxed at your top marginal rate, which reaches 35% over $256,225 and 37% over $640,600 of taxable income for a single filer in 2026 (IRS Rev. Proc. 2025-32).

My Q4 vest already happened. Is it too late to fix the shortfall?

No. Raising your W-4 withholding still helps if paychecks remain, because withholding is treated as paid evenly across the whole year. If few checks are left, a Q4 estimated payment by January 15, 2027 (IRS Form 1040-ES, 2026) is the other lever. Which one fits is worth walking through with your CPA or advisor.

What is the safe harbor everyone mentions?

It's the payment level that keeps the underpayment penalty off you. Pay 90% of your 2026 tax, or 110% of your 2025 tax if your 2025 AGI was above $150,000 (26 U.S.C. §6654(d)(1)). The 110% figure is the one that applies to most high earners.

Do I owe California something extra on the vest too?

Likely some. California withholds on stock and bonuses at a flat 10.23% (CA EDD, DE 231PS, 2026), which is a withholding rate rather than your actual California tax. A top-bracket year can leave the state side under-withheld the same way the federal side runs short. Confirm your California position with your CPA.