NSO Results
Exercise Cost (Cash)
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Spread (Taxable Income)
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Tax Owed
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Net Profit
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Effective Tax Rate
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Option Exercise Cost Calculator
Calculate the total cost, taxes owed, and net profit from exercising stock options (NSO or ISO).
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NSO (Non-qualified)
ISO (Incentive)
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NSO vs ISO Stock Options
NSOs (Non-Qualified Stock Options) are the most common type. The spread (FMV minus strike price) at exercise is taxed as ordinary income, subject to federal, state, and FICA taxes. You owe tax whether you sell or hold.
ISOs (Incentive Stock Options) have favorable tax treatment. No regular income tax at exercise, but the spread triggers AMT. If you hold for 2+ years from grant and 1+ year from exercise, all gains are taxed at long-term capital gains rates (typically 0%, 15%, or 20%).
FICA note: NSO spreads are subject to Social Security (6.2%, up to wage base) and Medicare (1.45%, plus 0.9% high-earner surtax). This calculator uses a flat 7.65% estimate. Your actual FICA may vary if you've exceeded the Social Security wage base.
This calculator is for estimation purposes only. Consult a CPA or tax attorney for advice specific to your situation.