HenryCalc

Stock option tax calculator

Estimate tax at exercise for ISOs (AMT) and NSOs (ordinary income + FICA) in one tool.

Bargain element$100,000
Exercise cost$10,000
Estimated AMT$17,840

Two option types, two tax systems

Employee stock options come in two flavors that are taxed completely differently. NSOs (non-qualified) are taxed at exercise: the spread between fair market value and your strike is ordinary income, withheld at the supplemental rate plus FICA. ISOs (incentive) get special treatment - no regular tax at exercise - but the spread becomes a preference item under the alternative minimum tax if you exercise and hold past December 31.

What this calculator estimates

Pick your option type, then enter your strike, fair market value, share count, and income. For NSOs the tool shows the spread, ordinary tax and FICA. For ISOs it shows the bargain element and the estimated AMT. Either way you also see the exercise cost - the cash to actually buy the shares.

Choosing your move

ISOs reward holding: meet the holding periods and the entire gain can be taxed as a long-term capital gain. The risk is a large AMT bill in the exercise year. NSOs are simpler - always ordinary income - but never get the capital-gains break. If you hold both, model each type separately, because in a year you exercise ISOs the AMT often dominates everything else.

Frequently asked questions

How are ISOs and NSOs taxed differently?
NSOs are taxed at exercise - the spread is ordinary income plus FICA. ISOs are not taxed under the regular system at exercise, but the spread becomes an AMT preference item if you exercise and hold past year-end.
Which is better, ISO or NSO?
ISOs can qualify for all-capital-gains treatment if you hold long enough, which is more favorable, but they risk triggering AMT. NSOs are simpler and predictable but always taxed as ordinary income. The right choice depends on your tax year and cash.
Do I pay FICA on stock options?
NSOs are subject to Social Security and Medicare at exercise. ISOs are not subject to FICA.

Last reviewed January 2026. This calculator provides general educational estimates based on the inputs you enter and simplified assumptions. It is not financial, tax, legal or investment advice, and figures may differ from your actual liability. Verify with a licensed CPA or financial advisor before acting.