Do employers have to pay out unused PTO?

It depends on the state. California, Colorado, Illinois, Massachusetts, Montana, Nebraska and a few others treat earned vacation as wages that must be paid on separation; many states leave it to the employer's written policy; some have no rule. Check your state labour department and your handbook.

Is a PTO payout taxed?

Yes. It is wages. Employers often withhold at the federal supplemental rate (22 %), so the net will be lower than the gross shown here.

Is sick leave paid out too?

Usually not, unless the policy pools sick and vacation time into one PTO bank. Separate sick banks are rarely paid out.

What hourly rate is used for a salaried employee?

Most employers divide the annual salary by 2,080 hours; some use the actual scheduled hours. The salary field uses 2,080.

PTO Payout Calculator

PTO payoutDollars

Unused PTO is worth

Enter hours and your hourly rate

8888.88

Hours: —
Days: —
Rate: —
Gross: —

Unused PTO, hours

What your last pay stub shows as available

Hourly rate, $

Salaried: annual salary ÷ 2,080 hours

Or annual salary, $

Fills the hourly rate at 2,080 hours a year

Hours in a working day

For the days figure

Whether unused PTO is paid out when you leave is set by state law and your employer's written policy; several states require it, others leave it to the policy. Check the accrual calculator for how the balance builds.

Type the unused hours from your last pay stub and your hourly rate, or your salary and the calculator converts it at 2,080 hours a year. The result is the gross value of the hours; tax is withheld on top, often at the supplemental rate. Whether you are owed the payout at all depends on your state and your employer's written policy.

Worked examples

37.5 hours at $24: 37.5 × $24 = $900 gross, about 4.7 days at 8 hours.
Salaried at $62,400: $62,400 ÷ 2,080 h = $30 an hour; 60 unused hours = $1,800 gross.

How it is calculated

Payout = unused hours × hourly rate. Hourly rate for a salary = annual salary ÷ 2,080 (40 hours × 52 weeks); use 2,000 if your employer does.

Questions people ask

Do employers have to pay out unused PTO?: It depends on the state. California, Colorado, Illinois, Massachusetts, Montana, Nebraska and a few others treat earned vacation as wages that must be paid on separation; many states leave it to the employer's written policy; some have no rule. Check your state labour department and your handbook.
Is a PTO payout taxed?: Yes. It is wages. Employers often withhold at the federal supplemental rate (22 %), so the net will be lower than the gross shown here.
Is sick leave paid out too?: Usually not, unless the policy pools sick and vacation time into one PTO bank. Separate sick banks are rarely paid out.
What hourly rate is used for a salaried employee?: Most employers divide the annual salary by 2,080 hours; some use the actual scheduled hours. The salary field uses 2,080.

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