How does RSU vesting work?

RSUs vest on a schedule - commonly four years, with shares releasing annually or quarterly, often after a one-year cliff. Each tranche becomes yours (and taxable as income) on its vest date based on the share price that day.

How should I value unvested RSUs?

Unvested RSUs are worth the current price times the shares, but the price will change before they vest. Modeling a growth assumption gives a range rather than a single false-precision number.

Are unvested RSUs guaranteed?

No. Unvested RSUs are forfeited if you leave before they vest, and their value moves with the stock. Treat the projection as a planning estimate, not locked-in compensation.

What is an RSU cliff?

Many grants have a one-year cliff - nothing vests for the first year, then a chunk vests at once, with the rest following monthly or quarterly. A cliff means leaving before your first anniversary forfeits the entire grant.

RSU vesting calculator

Project the value and timing of your RSU vesting schedule over the remaining years.

Seeing your vesting schedule

Restricted stock units release on a schedule - often over four years, vesting annually or quarterly, frequently after a one-year cliff. Each tranche is taxed as ordinary income on its vest date at that day’s share price. Projecting the schedule helps you plan around large vest dates, concentration risk, and the tax that lands with each one. This calculator spreads your shares across the remaining periods and grows the price at an assumed rate to show the value of each tranche.

Worked example

Say you have 4,000 unvested shares at $50, vesting annually over 4 years, with an assumed 5% annual price growth:

Tranches: 4, of 1,000 shares each
Year 1: 1,000 × $52.50 = $52,500
Year 2: 1,000 × $55.13 = $55,125
Year 3: 1,000 × $57.88 = $57,881
Year 4: 1,000 × $60.78 = $60,775
Projected total: about $226,000

At a flat $50 (0% growth) the same grant is worth exactly $200,000. The difference shows why a single number is misleading - the value depends entirely on where the stock goes.

Why model a range, not a point

Unvested RSUs are not cash. Their value moves with the stock and disappears if you leave before vesting. Rather than treat today’s price as fact, set a growth assumption (try an optimistic and a pessimistic case) to see how the total shifts. This is far more honest than the single dollar figure an offer letter implies.

Concentration risk

By the time several years of grants have vested, a large share of your net worth can be tied up in one company’s stock - the same company that pays your salary. If it stumbles, your job and your portfolio fall together. A common discipline is to sell a portion at each vest and diversify, treating vested RSUs as cash that happened to arrive as stock.

The tax that arrives with each vest

Every tranche is a taxable event: its full value is ordinary income on the vest date, with the usual federal supplemental, state, and FICA withholding. Big vest years can push you into higher brackets and trigger the extra Medicare surtax. To estimate the tax on a specific vest, use the RSU tax calculator.

Common mistakes

Treating unvested RSUs as guaranteed money when they are forfeitable and volatile.
Letting vested shares pile up and becoming dangerously concentrated.
Forgetting the tax hit on a large vest year and getting caught short at filing.

To see your full equity picture, pair this with the RSU tax calculator and, if you also hold options, the stock option tax calculator.

Last reviewed January 2026. This calculator provides general educational estimates based on the inputs you enter and simplified assumptions. It is not financial, tax, legal or investment advice, and figures may differ from your actual liability. Verify with a licensed CPA or financial advisor before acting.