PTO Payout Calculator

Multiply the unused hours by the employee's regular hourly rate. For a salaried employee, divide the annual salary by the annual working hours — 2,080 for a standard full-time schedule — to get that rate. Ten unused days at eight hours a day for someone earning $30/hour is 80 × $30 = $2,400 gross.

There is no federal requirement. It comes down to your state and your policy. Seven states treat accrued vacation as earned wages that must be paid out no matter what the policy says, and three more require it subject to conditions like employer size or length of service. A few others default to payout unless your written policy disclaims it in advance. In the rest, the obligation comes from your own policy — which state wage-payment law then enforces. The table on this page breaks it down state by state.

California, Colorado, Illinois, Louisiana, Massachusetts, Montana, and Nebraska treat accrued vacation as wages payable at separation, and a company policy cannot disclaim it. Three more require payout subject to statutory conditions: Maine (private employers with 11 or more employees), Rhode Island (employees with at least a year of service), and North Dakota (with a narrow first-year exception). Indiana, Maryland, and North Carolina default to payout unless a clear written policy given to the employee in advance says otherwise. Everywhere else, your own policy creates the obligation.

It depends on the state. California, Colorado, Louisiana, Montana, and Nebraska don't allow forfeiture of time an employee already earned. Most other states permit it where the policy is in writing, was communicated in advance, and left the employee a realistic chance to take the time — Illinois and Massachusetts are explicit about that last condition, and both still require payout of whatever remains at separation. In every state, an accrual ceiling, where employees simply stop accruing at a limit, is the safer way to control balances.

It's taxed as supplemental wages, so income tax withholding may be applied at a flat supplemental rate rather than your normal withholding, and FICA still applies. The figure this calculator produces is gross — the net will be lower, and by how much depends on the employee and their state.

Generally you pay out at the employee's final regular rate, not the rate in effect when the time was accrued. A handful of states and many policies say this explicitly. If your policy is silent, paying at the final rate is the safer reading.

Usually not, because nothing accrues — there's no balance to pay out. That's a large part of why unlimited PTO is attractive to employers in states like California. But if your unlimited policy is administered in a way that effectively creates accrued time, courts have looked past the label, so it needs to be genuinely unlimited.

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