Equity Vesting Tax Estimator
Estimate startup equity value and tax impact (ISO/NSO/RSU). Enter values for instant results with step-by-step formulas.
Formula
Net = (FMV - Strike) × Shares - Tax
Your profit is the spread between Fair Market Value (FMV) and Strike Price. However, taxes take a huge bite. RSUs/NSOs are taxed as salary (high rate). ISOs offer tax benefits but trigger AMT (Alternative Minimum Tax) risks.
Worked Examples
Example 1: RSU Grant
Problem:1000 shares, $0 strike, $50 FMV
Solution:$50k value. Taxed as income (~35%). Net ~$32.5k.
Result:$32.5k Net
Example 2: Early ISO Exercise
Problem:1000 shares, $1 strike, $5 FMV
Solution:Cost $1k. No immediate tax. Hold 1 year for lower Cap Gains tax.
Result:$4k Paper Gain (Untaxed)
Example 3: Underwater Option
Problem:Strike $10, FMV $5
Solution:Spread is negative. Do not exercise.
Result:$0 Value
Frequently Asked Questions
What is Vesting?
You earn your shares over time (usually 4 years). If you leave after 1 year, you keep 25%. If you leave before 1 year (Cliff), you get nothing.