RSU and stock option taxes are a critical part of equity compensation. Restricted Stock Units (RSUs) are taxed as ordinary income when they vest. Incentive Stock Options (ISOs) may trigger Alternative Minimum Tax at exercise and qualify for long-term capital gains at sale. Non-Qualified Stock Options (NSOs) are taxed as ordinary income on the spread at exercise. This calculator estimates your federal tax liability for all three equity types.
Equity Compensation Details
Fair market value on vesting date
Price you pay to exercise your options
Price when you sell (or current FMV if planning)
Your other taxable income (W-2 salary, etc.)
Months between vest/exercise and sale
Months from grant date to sale date (ISO qualifying: 24+)
Tax Breakdown
RSU vs ISO vs NSO Comparison
Disclaimer: This is an estimate based on 2026 federal tax rates. It does not account for state/local taxes, FICA taxes on RSU/NSO income, Net Investment Income Tax (NIIT), AMT credit carryforward, company-specific vesting schedules, or other individual circumstances. ISO AMT calculations are simplified estimates. Always consult a tax professional or financial advisor before making decisions about equity compensation.
How to Use the RSU & Stock Option Tax Calculator
Equity compensation is a valuable part of many tech and corporate compensation packages, but the tax implications can be complex. Whether you receive RSUs, ISOs, or NSOs, understanding how each type is taxed at vesting, exercise, and sale is essential for making informed financial decisions. This RSU and stock option tax calculator helps you estimate your federal tax liability so you can plan ahead.
Step 1: Select Your Equity Type
Choose between RSU (Restricted Stock Units), ISO (Incentive Stock Options), or NSO (Non-Qualified Stock Options). Each type has different tax treatment. RSUs are taxed as ordinary income when they vest. ISOs have no regular income tax at exercise but may trigger Alternative Minimum Tax, and they qualify for long-term capital gains if holding period requirements are met. NSOs are taxed as ordinary income at exercise on the spread between the exercise price and market price.
Step 2: Enter Share Details
Enter the number of shares vesting or being exercised, the vest price or fair market value per share, and for options (ISO/NSO) the exercise or strike price. Then enter the sale price per share. If you have not sold yet, enter the current market price to see what you would owe. The calculator uses these values to determine your ordinary income at vest or exercise, and your capital gain or loss at sale.
Step 3: Set Income and Filing Status
Select your tax filing status and enter your annual taxable income excluding the equity compensation. This determines which tax bracket applies to the ordinary income portion. For long-term capital gains at sale, your total income including the equity determines whether you pay 0%, 15%, or 20%. Higher income typically means a higher marginal rate on your equity income.
Step 4: Enter Holding Period
Specify how many months you have held (or plan to hold) the shares after vesting or exercise. Gains on shares held longer than 12 months qualify for the lower long-term capital gains rates. For ISOs specifically, you must hold for at least 12 months after exercise AND 24 months after the grant date for a qualifying disposition. Enter the time since the grant date if using ISOs.
Understanding Your Results
The calculator shows tax at vest or exercise, tax at sale, total combined tax, your effective tax rate, and net proceeds after all taxes. It also provides a holding period recommendation and a comparison note explaining how the same scenario would be taxed under each equity type. Use this information to optimize the timing of option exercises and share sales to minimize your overall stock option tax liability.
For a detailed walkthrough, see our guide: RSU Vesting Tax Strategy for Tech Employees.
FAQ
Is this RSU and stock option tax calculator free?
Yes, this equity compensation tax calculator is completely free with no signup or account required. All calculations run locally in your browser. Your financial data is never sent to any server or stored anywhere.
Is my financial data safe when using this calculator?
Absolutely. Every calculation happens entirely in your web browser using client-side JavaScript. No stock prices, share counts, income figures, or any other data are transmitted to any server. You can verify this by disconnecting from the internet and the calculator will continue to work.
What is the difference between RSUs, ISOs, and NSOs?
RSUs (Restricted Stock Units) are company shares granted to employees that vest over time and are taxed as ordinary income at vesting. ISOs (Incentive Stock Options) receive preferential tax treatment with no tax at exercise (though AMT may apply) and potential long-term capital gains rates at sale. NSOs (Non-Qualified Stock Options) are taxed as ordinary income at exercise on the spread between exercise and market price.
How are RSUs taxed when they vest?
When RSUs vest, the fair market value of the shares on the vesting date is treated as ordinary income. Your employer withholds income tax, Social Security, and Medicare taxes. The vesting value is added to your W-2 income. If you later sell the shares for more than the vest price, you owe capital gains tax on the additional profit.
What is the AMT impact of exercising ISOs?
When you exercise ISOs, the spread (market price minus exercise price) is an adjustment for Alternative Minimum Tax (AMT) purposes, even though it is not subject to regular income tax. If the AMT adjustment pushes your income above the AMT exemption, you may owe AMT in the year of exercise. This calculator provides an estimated AMT liability based on 2026 exemption amounts.
What is the ISO qualifying disposition holding period?
To receive the favorable long-term capital gains tax rate on ISOs, you must hold the shares for at least one year after exercise AND at least two years after the grant date. This is called a qualifying disposition. If you sell before meeting both requirements, it becomes a disqualifying disposition and the spread is taxed as ordinary income.
How are NSOs taxed differently from ISOs?
NSOs are taxed at exercise: the spread between the current market price and the exercise price is treated as ordinary income and subject to income tax plus payroll taxes. ISOs have no regular income tax at exercise, but may trigger AMT. NSOs have simpler tax treatment but typically result in higher total taxes than ISOs for long-term holders.
What are the 2026 federal income tax brackets used in this calculator?
This calculator uses 2026 federal tax brackets. For single filers, rates range from 10% on income up to $11,925 to 37% on income above $626,350. Long-term capital gains rates are 0% up to $48,350, 15% up to $533,400, and 20% above that for single filers. Brackets differ by filing status.