Why did my employer's withholding fall short on my RSUs?

Employers withhold at a flat assumed rate, often around 47%, regardless of your actual total income. If your real marginal rate is higher, the flat rate under-withholds and the gap is owed at self-assessment.

When is the true-up actually owed?

It is declared on your self-assessment return for the tax year the vest occurred in, with the balancing payment due by 31 January after that tax year.

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RSU & equity

Why You Owe More Tax Than Your Employer Withheld on RSUs

5 min read. Last verified 22 June 2026. 2026/27 rules.

The short answer

The true-up is the gap between the flat rate your employer withholds on an RSU vest (often around 47%) and your real marginal tax rate. If your real rate is higher, which is common once a vest pushes you into the 60% personal-allowance-taper zone, you owe the difference at self-assessment.

Key facts

Employer sell-to-cover typically withholds a flat ~47% (45% income tax + 2% NI).
Your real marginal rate depends on your total income for the year, not a flat assumption.
A vest landing in the £100,000-£125,140 band is taxed at about 60%, well above the flat rate.
Any shortfall is owed through self-assessment, due by 31 January after the tax year.

You checked your payslip, the tax looked about right, and then a self assessment bill arrived for thousands more. This is normal for RSUs, and it has a specific cause.

Flat withholding versus real rates

Employers withhold on vests at a flat assumed rate. Your actual rate depends on your total income for the year. If your other income, the size of the vest, or the personal allowance taper push your marginal rate above the flat rate, the withholding falls short.

A worked example

Salary £95,000, a £15,000 vest, employer withholds at 47% (£7,050).
The vest sits in the 60% zone, so the real tax is about £8,300.
True-up owed through self assessment: about £1,250.

Common questions

Why did my employer's withholding fall short on my RSUs?: Employers withhold at a flat assumed rate, often around 47%, regardless of your actual total income. If your real marginal rate is higher, the flat rate under-withholds and the gap is owed at self-assessment.
When is the true-up actually owed?: It is declared on your self-assessment return for the tax year the vest occurred in, with the balancing payment due by 31 January after that tax year.

Related playbooks

Sources

GOV.UK: Income Tax rates and allowances

Figures verified against gov.uk and gov.scot on 30 June 2026. Constants version 2026/27.3. 2026/27 tax year. This is a modelling tool for general insight, not financial or tax advice.