See what it costs to exercise, the gain, and the estimated tax on the spread.
This calculator estimates the cost to exercise, the gain, and the tax on the spread for non-qualified stock options.
Exercising means buying your shares at the fixed strike price, which is your out-of-pocket cost. The spread is the difference between the current share price and the strike, multiplied by the number of options, and it represents your gain on paper. With non-qualified stock options, that spread is generally taxed as ordinary income in the year you exercise.
The calculator multiplies your options by the strike to find the exercise cost, computes the spread as your gain, and applies your tax rate to that spread. This gives you a clear picture of cash needed and taxes owed before you commit. It is a simplified estimate and not tax advice, since real situations can involve withholding, alternative minimum tax on other option types, and later capital gains when you sell.
The spread is the current share price minus your strike price, times the number of options. For NSOs it is usually taxed as ordinary income at exercise.
At minimum you need the strike price times the number of options, plus enough to cover the tax on the spread. Some plans offer cashless exercise that sells shares to cover these costs.
No, it applies a single rate to the spread as an approximation. Your real tax depends on withholding, your total income, and later gains, so consult a tax professional.
See the exact formula and a worked example on our methodology page.