Equity Cliff Calculator

What a cliff actually does

A vesting schedule has two numbers that matter: the vesting period (how long until the whole grant is yours) and the cliff (a minimum period before anything vests at all). The common arrangement is a four-year vesting period with a one-year cliff, which behaves like this:

• Months 0 to 11: nothing has vested. If you leave, you receive none of the grant.
• At month 12: the cliff releases the first quarter in one event — 12/48ths of the grant.
• Every month after: one further 48th vests, so the grant completes at month 48.

Two consequences follow, and both are easy to miss:

• The cliff date is usually the most expensive date to resign. The month before it is worth more than the month after it, by a large margin.
• Before the cliff, the next event is the cliff — not next month. Most hand estimates say "I vest a bit every month", which is not true until after the cliff. This calculator shows the actual next event and its size.

How to read the result

1. Unvested is what you forfeit by leaving, at the value you entered. If the unvested line is zero, the equity has no bearing on your timing decision.
2. Check the progress figure against your own records. Vesting is administered by a plan administrator and the mechanics differ between award types, so treat this as an independent check, not as the authoritative number.
3. Look at what is at stake against what staying costs you. That comparison is the decision, and it is not arithmetic — this tool deliberately does not make it for you.

What this calculator does not do

• No tax treatment. How equity is taxed depends on the award type and your country, and the taxable event is often at vest rather than at grant. Ask about your own award; a generic estimate would mislead.
• No share-price forecast. It uses the value you enter. Public shares move daily and private equity has no market until there is a buyer, so try a lower figure and see whether your decision survives.
• No assumption about your plan's rules. Some plans accelerate vesting on certain events, some allow a longer exercise window, and some treat resignations and terminations differently. Read the plan documents or ask the plan administrator.
• No advice on whether to leave. This is arithmetic on dates and a number you supplied.

It is not financial, tax or legal advice.

Related decisions

1. Work out when you could actually finish: the notice period calculator handles month-end dates, weekends and holidays.
2. Comparing an offer against your current job, including the equity you would be giving up? Use the offer comparison calculator and enter the unvested figure here as the equity you would forfeit.
3. Once the date is set, the resignation letter templates cover what the letter must contain.
4. Preparing to apply again: start from the ATS-friendly resume template and check it with the free ATS check.

Common questions

What happens to my equity if I leave before the cliff?

You usually receive nothing. The cliff is a minimum period you must stay before any part of the grant vests. On a common one-year cliff, leaving in month 11 forfeits the entire grant and staying to month 12 releases the first quarter at once. That is why the cliff date is normally the most expensive date to resign.

How do I work out how many months I have been vested?

Count complete months from the grant date, not from when you started discussing the grant. This calculator takes the grant date and today, works out the complete months between them, and derives the vested amount from the vesting period and cliff you enter.

Is the next vesting amount the same every time?

No, and this is where most estimates go wrong. Before the cliff, the next event is the cliff itself, which releases the whole cliff portion in one go — a quarter of a four-year grant, for example. Only after the cliff does each month release one further slice, such as 1/48th.

Should I use the grant value on my offer letter?

You can, but treat it as the figure you were given rather than a price you could realise. Public-company shares move daily, and private-company equity has no market until there is a buyer. Run the calculation with a lower figure too, and see whether your decision changes.

Does this include tax?

No. Equity is taxed differently depending on the type of award and your country, and the taxable event often happens at vest rather than at grant. Use the gross figures here, then ask about the tax treatment of your specific award before you make a decision.

What is a good time to resign if I have unvested equity?

This tool will not answer that, and neither should any calculator. What it gives you is the size of the number at stake and the date it changes, which is the part that can be calculated. Whether that number is worth staying for depends on everything the arithmetic does not know.