RSUs at two employers this year? Why you may owe in April
If RSUs vested at two employers in 2026, both W-2s are probably under withheld. Each employer withholds as if it is your only source of pay, and most withhold a flat 22% on vests, while combined income can reach the 32%, 35% or 37% bracket. You can still close the gap before the year ends: add extra withholding at your current employer through a new W-4, or send an estimated payment by January 15, 2027. Safe harbor rules based on last year's tax may limit penalties. This page is not tax advice. A CPA can size the right amount for your own numbers.
Why are both W-2s short when RSUs vest at two employers?
Each payroll sees only the wages it pays. It does not see your other employer, a spouse's pay, or the bracket your combined income lands in. When RSUs vest, the shares are generally treated as supplemental wages, and they are commonly withheld at the 22% flat rate for supplemental wages (IRS Publication 15). For RSU basics, see what unvested RSUs are and what happens if you leave.
The flat rate is a withholding rate, not your tax rate. Your actual rate depends on your total taxable income for the year. For 2026, these are the top three federal brackets (IRS, 2026 inflation adjustments):
| Rate | Single, taxable income over | Married filing jointly, taxable income over |
|---|---|---|
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
Any vest income that lands in one of these brackets but was withheld at 22% leaves a gap of 10 to 15 points on those dollars. Two employers make that more likely, because neither one knows the other pushed you up.
What changes once your RSU income passes $1 million?
Supplemental wages over $1 million in a calendar year are subject to mandatory withholding at 37% (IRS Publication 15). The threshold is counted per employer: it looks at supplemental wages paid by one employer, not your combined total (26 CFR 31.3402(g)-1). So two employers that each pay you $700,000 in vests can both stay at 22%, even though your combined supplemental pay is $1.4 million. The regulation has aggregation rules that can treat related companies as one employer, so check with a CPA if your two employers are connected.
Did you pay too much Social Security, and how do you get it back?
The employee Social Security rate is 6.2%, on wages up to the 2026 wage base of $184,500 (IRS Topic 751). Each employer applies that limit on its own. If two employers together withheld on more than $184,500 of your wages, you paid more than the cap.
If two employers together withheld Social Security tax on more than $184,500 of your 2026 wages, the excess generally comes back as a credit on your 2026 Form 1040. It does not reduce what you owe during the year (IRS Topic 608). If one employer overwithheld on its own, that is not a 1040 credit; that employer fixes it, or you use Form 843. On a joint return, each spouse figures the excess separately.
The timing matters in November. The credit arrives at filing, so it does not help your fourth quarter cash or count toward closing the gap now.
Additional Medicare tax works the other way. An employer withholds the 0.9% only on wages it pays you over $200,000, whatever your filing status. You owe it on combined wages over $200,000 single, $250,000 married filing jointly, or $125,000 married filing separately (IRS Topic 560). Two employers that each pay you under $200,000 may withhold none of it.
How big could the gap be? (a worked illustration)
This is an illustration, not your numbers. It uses a single filer and only the 2026 figures cited on this page.
Say Employer A paid $120,000 of salary and $80,000 of vested RSUs before you left, $200,000 in total. Employer B has paid $60,000 of salary and $90,000 of vests, $150,000 in total. Combined wages are $350,000. After the 2026 standard deduction of $16,100 for a single filer, taxable income is $333,900.
Assume the $170,000 of vests are the top dollars of that income, all withheld at 22%:
- $77,675 sits above $256,225, in the 35% bracket. The 13 point gap on it is about $10,098.
- $54,450 sits between $201,775 and $256,225, in the 32% bracket. The 10 point gap on it is about $5,445.
- The remaining $37,875 of vests falls in the 24% bracket, a 2 point gap of about $758, not counted here.
That is roughly $15,543 of federal income tax not withheld on the vests alone. On top of it, Additional Medicare tax is owed on $150,000 of combined wages above $200,000, about $1,350, and neither employer paid this person over $200,000, so neither withheld it. Separately, the two employers withheld Social Security on $334,500 of wages, $150,000 over the wage base, so about $9,300 should come back as a credit at filing. That credit does not shrink the gap you face before January.
Salary withholding, state tax and every other line of a real return are left out. A CPA can run the full picture.
What can you still do before January 15, 2027?
Extra withholding on a new W-4 at your current employer
You can give your current employer a new Form W-4 asking for an extra amount withheld from each paycheck, on line 4(c) (IRS, About Form W-4). This is strong late in the year for one reason. For the underpayment penalty, one fourth of your withholding is generally treated as paid on the due date of each of the four payment periods, unless you elect to use the actual dates it was withheld (IRS Publication 505; Form 2210 instructions).
Extra withholding through a new W-4 is generally treated as paid evenly across the year, so it can cover earlier quarters; a 1040-ES payment by January 15, 2027 counts only from the day you pay it.
A 1040-ES payment for the fourth period
The fourth period estimated payment for 2026 is due January 15, 2027 (IRS Form 1040-ES). It counts from the day you pay it. If the shortfall built up in earlier periods, those periods can still show an underpayment even after a January payment.
Which fits when
| Your situation | Extra W-4 withholding | 1040-ES by Jan 15, 2027 |
|---|---|---|
| Several paychecks left this year | Spreads the amount across them | Works, counts from the payment date |
| One or two paychecks left | May not hold the full amount | Can cover what withholding cannot |
| More vests coming at your current employer | Can raise withholding around them | Works alongside |
| Little cash until vests settle | Comes out of pay as it lands | Needs cash on the payment date |
This table describes how each option works. It is not a recommendation for your situation.
How does safe harbor limit the penalty?
You generally avoid the underpayment penalty if your withholding and timely estimated payments cover at least 90% of your 2026 tax or 100% of your 2025 tax. If your 2025 adjusted gross income was over $150,000, or $75,000 if married filing separately, the prior year figure is 110% (IRS Form 1040-ES).
Safe harbor limits the penalty, not the tax. You can meet it and still owe a balance in April. Form 2210 is where the penalty is figured, and a CPA can tell you which test fits your year.
What about state tax?
States that tax wages also withhold on supplemental wages, each by its own rules, and those rules may not match your combined income either. Check your state's rules, or ask a CPA who works in your state.
How does this connect to your next move?
If you are weighing another offer, two numbers matter: the vests you would forfeit, and the tax on the ones you keep. Read about a make-whole grant for the RSUs you leave behind, and if you hold options too, how long you have to exercise options after leaving. For the full figure, see what walking away actually costs.
FAQ
Why do RSUs at two employers leave me under withheld? Each employer withholds only on what it pays you, as if that were your only income, and most withhold a flat 22% on RSU vests. Your combined income can fall in a higher bracket than either employer used, so the total withheld can come up short.
Do I get back Social Security tax withheld by two employers? If two or more employers together withheld Social Security tax on more than the 2026 wage base of $184,500, you can generally claim the excess as a credit on your federal return. It comes back when you file, not during the year.
Is it too late in the year to fix under withholding? Not necessarily. You can ask your current employer to withhold more through a new Form W-4, or make an estimated payment by January 15, 2027. Withholding is generally treated as paid evenly through the year, while an estimated payment counts from the day you pay it. A CPA can say which fits your numbers.
What is the safe harbor for estimated tax? You generally avoid the underpayment penalty if withholding and timely estimated payments cover at least 90% of your 2026 tax or 100% of your 2025 tax. If your 2025 adjusted gross income was over $150,000, or $75,000 if married filing separately, the prior year figure is 110%.
Does the 37% withholding rate apply if my total RSU income is over $1 million? The 37% rate applies to supplemental wages over $1 million paid by one employer in a calendar year. Two employers that each pay you less than that generally withhold at their own rates, even if your combined total is higher.
Sources
- IRS, Publication 15, Employer's Tax Guide (22% and 37% supplemental wage withholding)
- eCFR, 26 CFR 31.3402(g)-1 (supplemental wages, the $1 million threshold per employer)
- IRS, 2026 tax inflation adjustments and Rev. Proc. 2025-32 (2026 brackets and standard deduction)
- IRS, Topic 751 (Social Security rate and wage base), Topic 608 (excess Social Security), Topic 560 (Additional Medicare tax)
- IRS, Form 1040-ES (Jan 15, 2027 due date and safe harbor), Publication 505 and Form 2210 instructions (withholding timing), About Form W-4 (line 4(c))
This page is not tax advice. A CPA can size the right amount for your own numbers.
Thinking about another move? See your walk away cost before you decide.