Free tool
Option exercise cost calculator
What it costs to exercise your vested options, and what the shares are worth on paper at a price you choose. It counts money, and it counts no tax.
These are sensitive numbers. The link carries them in the address itself, so share it only with people you would show the grant to. Nothing is stored on our side either way.
Where the numbers come from
Each figure line by line, per share and in total, so you can check it rather than trust it.
| Line | Per share | Total |
|---|---|---|
| The breakdown appears here once your figures are in. | ||
How the figures are worked out
Every step, in the open, so you can check a grant letter against it rather than take either on trust. A calculator you cannot check is an ad.
The cost to exercise
Exercise cost is your vested options multiplied by the strike price per share. That is the cash you hand over to turn options into shares you own, and it is fixed by the strike in your grant, not by any price movement since. If your strike is genuinely zero, the cost is zero and the tool says so; a zero here otherwise usually means the field is simply empty.
The paper value, and the gross paper gain
Paper value is your options multiplied by the share price you entered. The gross paper gain is that value minus the exercise cost, which is the same as the options multiplied by the gap between share price and strike. It is gross because nothing has been taken off it: no tax, no fees, no discount for shares you cannot yet sell. And it is paper because it is the value of shares you would hold, not cash, until an actual sale.
Underwater, shown rather than hidden
If the share price you entered is below your strike, the gross paper gain is negative and the tool shows the real figure and labels it underwater rather than clamping it to zero. Exercising at that price would cost more than the shares are worth on paper. That can change, in either direction, which is precisely why no honest calculator states what an option is worth ahead of time. This is a snapshot at the price you chose.
What this tool does not know
The tax on your exercise, in any country, of any kind. It does not know whether your option is one a tax authority treats favourably, what is owed at exercise versus at sale, what a holding period changes, or what your own circumstances add. It puts no valuation on a private share, applies no fees, and does not tell you whether exercising is a good idea. It counts the money that moves and stops there.
For the concepts in plain words, read how ESOP vesting works and the guide to startup equity and ESOPs. For how grants, vesting and exercises are recorded so each employee can see their own position, see the Compensation and Equity module.
Questions with complete answers
Why does this compute no tax?
Because the tax on an option exercise is not one number we could honestly print. It depends on the country, on whether the option is one a tax authority treats favourably or not, on the gap between strike and share price at exercise, on how long you then hold the shares, and on your own circumstances, and it changes. A figure a free page put on your screen would be confidently wrong for most readers. This tool counts the money that moves when you exercise, and leaves the tax to someone qualified in the country concerned.
What is the difference between exercise cost and paper value?
Exercise cost is the cash you hand over to buy the shares: your vested options multiplied by the strike price fixed in your grant. Paper value is what those same shares are worth at the price you entered: your options multiplied by that price. The gross paper gain is the second minus the first. It is called paper because it is not money in your pocket, it is the value of shares you now hold, and turning it into cash means a sale that has its own price, its own timing and its own tax.
What share price should I put in?
Whatever price you are testing, and it is your figure, not ours. For a listed company that is the market price. For a private company there is no public price, so people use the last funding round price, a 409A or equivalent valuation, or a number they are simply exploring. The tool does not know or guess any of these, so try a few: the output is only ever as good as the price you gave it, and for a private company nobody can tell you what a share will actually fetch.
What does underwater mean?
It means the share price you entered is below your strike, so exercising would cost more than the shares are worth on paper. The gross paper gain is negative, and the tool says so rather than hiding it. Options can be underwater for a while and recover, or not, which is exactly why the value of an option cannot be stated as a fact ahead of time. This is a snapshot at the price you chose, not a prediction.
Is anything I type here saved or sent anywhere?
No. The whole calculation runs in your browser and nothing leaves the page. There is no email wall, no account and no storage, so closing the tab clears it. The one exception is the link button, which puts your figures into the address itself so you can send them to someone; the page tells you that before you copy, and these are sensitive numbers, so share the link only with people you would show the grant to.
An employee who can see their own grant and exercise it themselves beats one who has to ask.