Employee Stock Option Value Calculator
Employee stock options give you the right to purchase company shares at a fixed price (the exercise or strike price) for a set period. The value you can capture today is the intrinsic value: the difference between the current stock price and your strike price, multiplied by the number of vested options. Options where the stock price exceeds the strike price are called "in the money." This calculator shows your current intrinsic value, total exercise cost, gross proceeds if you sell immediately after exercising, and the total gain before tax.
Stock option intrinsic value formula
Intrinsic Value per Option = max(Current Price - Strike Price, 0)
Total Intrinsic Value = Intrinsic Value per Option * Number of Options
Exercise Cost = Strike Price * Number of Options
Status: In the Money if Current Price > Strike Price, else Out of the Money
Note: This calculates intrinsic value only. Time value (the potential for future price appreciation before expiry) is not captured here but adds to the total economic value of unexercised options.
Key stock option terms
- Strike price (exercise price): the fixed price at which you can buy shares, set at grant date.
- Vesting: the schedule over which your options become exercisable. Most plans vest over 4 years with a 1-year cliff.
- Expiration: options typically expire 10 years from grant date, or 90 days after leaving the company.
- NSOs (Non-Qualified): taxed as ordinary income at exercise on the spread (current price minus strike price).
- ISOs (Incentive): potential long-term capital gains treatment if holding periods are met, but AMT may apply.
Employee stock options: frequently asked questions
What is the intrinsic value of a stock option?
Intrinsic value is the immediate profit if you exercised the option today. It equals the current stock price minus the exercise (strike) price, multiplied by the number of options. If the current price is below the strike price, intrinsic value is zero (the option is 'out of the money').
What are NSOs vs ISOs?
Non-Qualified Stock Options (NSOs) can be granted to employees, directors, and contractors. The spread at exercise is taxed as ordinary income. Incentive Stock Options (ISOs) are only for employees and may qualify for capital gains tax treatment if holding requirements are met (exercised stock held at least 1 year after exercise and 2 years after grant).
When should I exercise my stock options?
The timing of exercise depends on your tax situation, the stock's prospects, and your personal financial needs. For ISOs, early exercise may trigger AMT (Alternative Minimum Tax). For NSOs, exercise triggers ordinary income tax on the spread. Consult a tax advisor before exercising.
What happens to my options if I leave the company?
Most option agreements allow a window of 90 days after termination to exercise vested options. After that window, unexercised options expire worthless. Some companies extend this window; check your option agreement carefully.
What is the breakeven stock price for my options?
The breakeven price is the stock price at which your gain from exercising equals the taxes you owe plus the exercise cost. For NSOs taxed at ordinary income rates, the breakeven is higher than the grant price. This calculator shows the intrinsic breakeven (ignoring tax) as strike price itself.
Official sources
- IRS Publication 525: Taxable and Nontaxable Income (Employee Stock Options).
- SEC Office of Investor Education: Employee Stock Options.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.