Taxes on vested stock options depends on the kind of stock option you have, whether it is an ISO or NSO; and how long you hold those options before selling them. For non-qualified stock options, you pay ordinary income taxes when you exercise the options, and capital gains taxes when you sell the shares. Whereas, for incentive stock options, you only pay taxes when you sell the shares, either ordinary income or capital gains, depending on how long you held the shares.