Tools · Federal + state

NSO exercise cost & net shares

An NSO exercise is taxed like a bonus: the spread is ordinary income the moment you exercise, and payroll withholds on it. Size the exercise with the slider and watch the all-in cost move — strike, federal and state withholding, and what a cashless exercise leaves you in shares. The background is in the NSO explainer.

1 · Option details

Strike price per share$

Current share price / 409A valuation$

Max shares to exercise — sized with the slider in the summary below

Spread per share: — · Taxable compensation income: —

2 · Year-to-date payroll

Both figures are what the employer whose options you are exercising has paid you so far this calendar year, before this exercise — withholding runs per employer, so wages from a different job don't enter the math. Exercising options from a former employer who has paid you nothing this year? Enter $0 for both, even if a new job has paid you plenty — the former employer withholds without regard to it. Supplemental wages (bonuses, RSU vests, earlier exercises) decide where the federal 22% / 37% line falls; total wages decide how much Social Security base is left and when Additional Medicare starts.

YTD supplemental wages$

YTD total wages$

3 · State withholding

California and New York rates are built in; for any other state, look up its supplemental withholding rate and enter it — rates change and vary too much for this tool to know all fifty. Each row applies its rate to the full spread.

Moved since the grant? Options are generally taxable to the state where the work between grant and vest (or exercise) was done — a state you no longer live in can still tax part of the spread. The multi-state equity allocation calculator splits the income by workday if you need the breakdown.

NSO exercise — cost and net-share projection

Prepared · jonathanlinci.com

Taxable income—

Cash

Withholding—

Total cost—

Cashless

Shares sold to cover—

Net shares deposited—

— exercised

Sources

Federal 22% / 37% supplemental rates and the $1,000,000 cumulative threshold — IRS Publication 15 (Circular E), "Supplemental Wages."
Social Security 6.2% rate and 2026 wage base ($184,500) — SSA, contribution and benefit base.
Medicare 1.45% and Additional Medicare 0.9% withholding above $200,000 — IRS, Additional Medicare Tax questions and answers.
California 10.23% supplemental rate for stock options and bonuses — EDD Pub. DE 231PS, Personal Income Tax Withholding — Supplemental Wage Payments.
New York State 11.70% supplemental rate — NYS-50-T-NYS.
New York City 4.25% supplemental rate — NYS-50-T-NYC.

Withholding is not the tax bill. The federal flat rates (22% on the first $1,000,000 of the year's supplemental wages, 37% above) are what payroll withholds, not what you owe — on a large spread the actual marginal rate is usually higher, so plan for a balance due or estimated payments. State rates here are flat supplemental withholding rates; your state may use a different method, and you are responsible for confirming any rate you enter. Employee (W-2) mechanics only — contractors get no withholding and generally owe self-employment tax instead; see the NSO explainer. Estimate only; not tax advice, and using it does not create a client relationship.