What is the difference between stock options and RSUs?

Stock options give you the right to buy company shares at a fixed "strike price" — you profit if the stock price rises above that price. RSUs (Restricted Stock Units) are grants of actual shares that vest over time; they have value as long as the stock is worth anything. RSUs are simpler and lower-risk, while stock options offer more upside if the stock price increases significantly.

How are RSUs taxed when they vest?

RSUs are taxed as ordinary income on the vesting date based on the stock's fair market value at that time. Your employer typically withholds shares to cover the tax, which is often at a flat supplemental withholding rate. If you hold the shares after vesting and sell later at a higher price, the additional gain is taxed as a capital gain (short-term or long-term depending on holding period).

Taxes

What Are Your Stock Options and RSUs Worth?

See what your ISOs, NSOs, or RSUs are worth after taxes — and whether you'd keep more by selling now or holding for long-term treatment. Models vesting schedules, price scenarios, and qualifying dispositions.

Current Monthly Payment

—

New Monthly Payment

—

Est. Interest Saved

—

Break-Even

—

Grant Details

Equity Type

Number of Shares

Strike Price

Current Fair Market Value

Spread: $15.00/share

Tax Rates

Ordinary Rate

LT Cap Gains

Current Spread Value

$150,000

10,000 shares × $15.00

Exercise Cost

$100,000

10,000 × $10.00

Sell Immediately

$102,000

Tax: $48,000 (32.0%)

Hold 1+ Year

$127,500

Tax: $22,500 (15.0%)

Potential Tax Savings from Holding

+$25,500

ISO qualifying disposition: hold 2+ years from grant, 1+ year from exercise

After-Tax Proceeds Comparison

Compares after-tax proceeds from selling immediately versus holding for long-term capital gains treatment. The orange dashed line shows the pre-tax value. For ISOs, the holding benefit assumes a qualifying disposition (2+ years from grant, 1+ year from exercise).

Grant Details

I’m...

Equity Type

Favorable tax treatment if holding requirements met

Number of Shares/Units

Strike/Exercise Price

Current Fair Market Value

Current spread: $15.00/share

Grant Date

Vesting & Tax

Schedule Type

Total Months

Cliff (mo)

Cliff %

Price Scenarios

7 scenarios from $12.50 to $125.00

Total Spread Value

$150,000

10,000 shares × $15.00/share

Break-even price

$10.00

Net Proceeds by Price Scenario

Compares after-tax net proceeds across 7 price scenarios. "Hold" assumes qualifying disposition.

Cliff

Apr 2027

2,500 shares

100% Vested

Apr 2030

9,988 shares

Detailed Tax Analysis by Scenario

Scenario	Price	Gross	Exercise	Net (Sell)	Net (Hold)	Benefit
50% Drop	$12.50	$125,000	$100,000	-$23,000	$21,250	+$44,250
25% Drop	$18.75	$187,500	$100,000	$39,500	$74,375	+$34,875
No Change	$25.00	$250,000	$100,000	$102,000	$127,500	+$25,500
50% Gain	$37.50	$375,000	$100,000	$187,000	$233,750	+$46,750
2x	$50.00	$500,000	$100,000	$272,000	$340,000	+$68,000
3x	$75.00	$750,000	$100,000	$442,000	$552,500	+$110,500
5x	$125.00	$1,250,000	$100,000	$782,000	$977,500	+$195,500

* Shaded rows indicate stock price at or below strike price (options are underwater)

Key Considerations for ISO

Qualifying disposition: Holding shares 2+ years from grant and 1+ year from exercise may result in long-term capital gains treatment on the entire gain.

Disqualifying disposition: Selling earlier typically triggers ordinary income tax on the spread at exercise.

AMT consideration: The spread at exercise may be subject to Alternative Minimum Tax (not modeled here).

Break-even price: The stock must be above $10.00 for these options to have positive value.

About This Analysis

This calculator provides estimates for educational purposes only. It does not account for Alternative Minimum Tax (AMT) implications for ISOs, state or local tax variations, Net Investment Income Tax (NIIT), or the full complexity of your personal tax situation. Tax rates used are simplified estimates. Private company stock values are based on 409A valuations and may not reflect actual liquidity. Consult a qualified tax professional before making exercise, hold, or sell decisions on equity compensation.

Related Resources

Related Calculators

Roth Conversion Calculator

Analyze the tax impact of Roth conversions

Tax-Deferred Growth Analyzer

Visualize the power of tax-deferred compounding

NUA Calculator

Evaluate the NUA strategy for employer stock in your 401(k)

Also Consider

Compound Interest Calculator

See how your money grows over time

Investing

Quick Reference

Insights

Understanding Your Stock Options and RSUs: A Tax-First Approach15 min read

Explore all Taxes tools

4 calculators · 7 reference pages

What Are Your Stock Options and RSUs Worth?

Grant Details

Tax Rates

After-Tax Proceeds Comparison

How to Use This Calculator

Related Resources

Related Calculators

Also Consider

Quick Reference

Insights