About the Stock Options Calculator
This stock options calculator shows what your employee stock options could be worth at a future share price and how much you would keep after tax. Enter the number of options, your strike (exercise) price, today’s fair market value and the price you expect to sell at, then choose whether your grant is an incentive stock option (ISO) or a non-qualified stock option (NSO).
It is designed for startup and public-company employees deciding whether to exercise, comparing offers, or estimating the cash needed to buy shares. The results split the value into the cost to exercise, the paper gain, the tax due at exercise and at sale, and your net profit.
The model assumes you exercise at today’s fair market value and later sell the shares after holding them long enough for long-term capital gains treatment (for ISOs, more than two years from grant and one year from exercise). For ISOs the spread at exercise is not taxed as regular income but counts toward the alternative minimum tax (AMT), which is shown separately. It uses US federal income tax rules as they apply for the 2026 tax year; add your state rate into the tax rates if you want an all-in estimate. For NSOs, Social Security and Medicare (FICA) taxes also apply to the exercise spread and are not included.
With the default inputs, the after-tax profit is $195,500.00. Change any value above to recalculate instantly.
How to use the stock options calculator
- 1Enter how many vested options you hold and your strike price from the grant agreement.
- 2Enter today’s fair market value (the 409A value for private companies).
- 3Enter the price you expect to sell the shares for.
- 4Choose ISO or NSO and enter your marginal income and capital gains tax rates.
- 5Review the cash needed to exercise, the tax at each step and your after-tax profit.
Formula and method
The pre-tax gain is the number of options N times the difference between the sale price S and the strike K. Exercising costs N × K. For a non-qualified option (NSO) the spread at exercise, N × (FMV − K), is taxed as ordinary wages; the shares then get a cost basis equal to FMV, and any further rise to S is a capital gain.
For an incentive stock option (ISO) held for a qualifying disposition, there is no regular income tax at exercise and the entire gain from strike to sale is taxed at long-term capital gains rates. However, the exercise spread is an adjustment for the alternative minimum tax, so large ISO exercises can trigger AMT in the exercise year. If the sale price is at or below the strike, the calculator assumes you do not exercise.
- N
- Number of options
- K
- Strike (exercise) price
- FMV
- Fair market value on the exercise date
- S
- Expected sale price
- t_ord, t_LT
- Ordinary income and long-term capital gains tax rates
Worked examples
10,000 ISOs, $2 strike, sold at $25
Exercising 10,000 options at $2 costs $20,000. Selling at $25 gives a $230,000 pre-tax gain. As a qualifying ISO sale, the whole gain is taxed at 15%, or $34,500, leaving $195,500. The $60,000 spread at exercise ($8 − $2 × 10,000) is an AMT preference item in the exercise year.
Same grant as NSOs
With NSOs the $60,000 spread at exercise is taxed as ordinary income at 32%, or $19,200. The later rise from $8 to $25 ($170,000) is taxed at 15%, or $25,500. Total tax is $44,700 and after-tax profit is $185,300 — about $10,200 less than the ISO case.
Public company NSOs, 2,000 options at $40 strike, sold at $65
Exercising 2,000 options at $40 costs $80,000 while the stock is at $55, creating a $30,000 spread taxed at 24% ($7,200). Selling later at $65 adds a $20,000 long-term gain taxed at 15% ($3,000). The $50,000 pre-tax gain becomes $39,800 after tax.
Frequently asked questions
What is the difference between ISOs and NSOs?+
ISOs can qualify for long-term capital gains treatment on the whole gain if you hold the shares more than two years from grant and one year from exercise, but they can trigger AMT. NSOs are taxed as ordinary income on the spread when you exercise, and then capital gains on any later growth.
How much does it cost to exercise stock options?+
The exercise cost is the number of options times the strike price. For NSOs you also owe income tax on the spread at exercise, which employers usually withhold, so the total cash needed can be much higher than the strike cost.
What is a 409A valuation?+
Private companies set the fair market value of their common stock through an independent 409A valuation. It is used as the FMV at exercise for tax purposes and is usually well below the price paid by venture investors for preferred shares.
Can exercising ISOs trigger AMT?+
Yes. The spread between fair market value and strike on ISOs you exercise and keep past year-end is added to income for the alternative minimum tax. If that pushes your AMT income above the exemption, you may owe AMT even though no regular tax is due.
What happens if the share price falls below my strike?+
Options with a strike above the current price are “under water” and have no exercise value. You would normally let them sit (or expire) rather than exercise, so there is no gain and no tax.
Is there a limit on how many ISOs I can get?+
Only the first $100,000 of ISOs (measured by the stock’s value at grant) that become exercisable in any calendar year can qualify as ISOs. Options above that limit are automatically treated as NSOs for tax purposes, even if the grant calls them ISOs.
What is a disqualifying disposition?+
If you sell ISO shares before meeting both holding periods, the sale is a disqualifying disposition and the spread at exercise becomes ordinary income, similar to an NSO. This calculator assumes a qualifying sale for ISOs.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.