Free Employee Stock Option Calculator
Calculate the potential value of your employee stock options. Model vesting schedules, exercise costs, taxes, and returns at different exit valuations.
Option Grant Details
Vesting Schedule
Company Valuation
Enter your option grant details to calculate potential value
How to Use the Employee Stock Option Calculator
Enter Your Option Grant Details
Input the number of options granted, strike price (exercise price from your option agreement), and vesting schedule details (typically 4-year vesting with 1-year cliff).
Add Company Valuation Data
Enter the current company valuation or 409A fair market value, plus total shares outstanding. This determines your current per-share value and ownership percentage.
Calculate Vesting Progress
Input your start date and time employed to see vested vs. unvested options. The calculator shows how many options you can exercise today and your vesting timeline.
Model Exit Scenarios
Enter potential exit valuations to calculate your option value at exit. See exercise cost, tax estimates (ISO vs. NSO), and net proceeds after all deductions.
Pro tip: Your data is processed entirely in your browser. Nothing is sent to any server, ensuring complete privacy.
Understanding Stock Options
Stock options are a key part of startup compensation. They give you the potential to share in the company success, but understanding their value requires knowing about vesting, exercise prices, and tax implications.
Key Terms
- Strike Price: The fixed price to buy shares, set at grant date fair market value
- Vesting: The process of earning options over time (usually 4 years)
- Cliff: Minimum time before any options vest (usually 1 year)
- Spread: Difference between current value and strike price (your potential profit)
Frequently Asked Questions
What are employee stock options?
Employee stock options (ESOs) give you the right to buy company shares at a fixed price (strike price) in the future. If the company value increases, you can buy at the lower strike price and potentially sell at the higher market price for a profit.
What is a vesting schedule and cliff?
A vesting schedule determines when you earn your options over time. A typical schedule is 4 years with a 1-year cliff. The cliff means you must stay 1 year to vest anything. After the cliff, 25% vests immediately, then the rest vests monthly.
What is the strike price or exercise price?
The strike price is the fixed price you pay to buy shares when exercising options. It is typically set at the fair market value (409A valuation) when options are granted. Early employees get lower strike prices, which is valuable if the company grows.
How are stock options taxed?
ISOs (Incentive Stock Options) have favorable tax treatment if held 2+ years from grant and 1+ year from exercise. NSOs (Non-Qualified Stock Options) are taxed as ordinary income on the spread at exercise. Consult a tax professional for your situation.
What happens to unvested options if I leave?
Unvested options are typically forfeited when you leave. Vested options usually must be exercised within 90 days of departure, or they expire. Some companies offer extended exercise windows (up to 10 years) as a benefit.
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