Employee Stock Option Benefit Calculator

CCPCs still get the full 50% deduction with no cap. Everyone else is limited to the first $200,000 of option value vesting each year, and the excess is fully taxed.

Reading This Tool

How To Use This Calculator

Enter the strike price, the share value at grant and at exercise, and how many shares were exercised.

The taxable benefit is the spread between the exercise price and fair market value at exercise. Whether half of that benefit is deductible depends on the employer type and, for non-CCPCs, whether this year's vesting stayed under the $200,000 annual limit, measured using the share value at the original grant date, not at exercise.

Your Inputs

Employer Type

Exercise (Strike) Price Per Share $10.00

FMV Per Share At Exercise $25.00

FMV Per Share At Grant Date $10.00

Shares Exercised This Year 5,000

Marginal Tax Rate 45.0%

The $200,000 annual limit is measured on the value of shares at the grant date, not the exercise date, so a large gain on a small number of shares can still be fully deductible if the grant-date value was modest.

Taxable Benefit

Net Taxable Amount After Deduction

Total Option Benefit

Eligible For 50% Deduction

Tax Owing

Option Benefit: Deductible vs. Fully Taxable Portion

CCPC shares held at least two years qualify for the deduction even without meeting an alternative holding condition. Non-CCPC employers must also designate which options are subject to the $200,000 limit and notify employees, an administrative step some employers miss.

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