How PTO Accrual Is Calculated
Accrual rate = PTO hours per year ÷ Hours worked per year
80 hours of PTO a year over 2,080 hours worked is an accrual rate of 0.0385 hours per hour worked, or 3.08 hours per biweekly pay period.
| PTO per year | Per hour worked | Per biweekly period | Workdays |
|---|---|---|---|
| 40 hours | 0.0192 | 1.54 | 5 |
| 80 hours | 0.0385 | 3.08 | 10 |
| 120 hours | 0.0577 | 4.62 | 15 |
| 160 hours | 0.0769 | 6.15 | 20 |
| 200 hours | 0.0962 | 7.69 | 25 |
PTO Hours to Days
PTO hours convert to days by dividing by the hours in a workday. 20 hours of PTO is 2.5 days at 8 hours a day and 2 days at 10 hours a day.
PTO Payout When You Leave
A PTO payout is unused PTO hours times the hourly rate, paid with the final paycheck where the law or policy requires it. Federal law does not require PTO or a payout. California, Colorado, Massachusetts and other states treat earned vacation as wages that must be paid out at separation.
The payout is a supplemental wage, taxed like a bonus.
PTO Accrual per Pay Period
Per-pay-period accrual adds a fixed number of PTO hours to your balance on every paycheck, whatever hours you worked in that period.
An employer that credits 4 hours every biweekly paycheck gives 104 h a year, which is 13.0 workdays of 8 hours. The same 4 hours on a semi-monthly schedule give fewer hours a year, because there are 24 paychecks instead of 26.
PTO per year = Hours per paycheck × Paychecks per year
To find the per-paycheck figure from a yearly grant, divide the other way: 80 hours ÷ 26 paychecks is 3.08 hours each payday.
PTO Accrual Based on Hours Worked
Hours-worked accrual gives PTO in proportion to the hours on your time card, so a long week earns more and a short week earns less. Employers state it as "1 hour for every X hours worked".
| Accrual rule | PTO a year at 40 hours a week | Workdays of 8 hours |
|---|---|---|
| 1 hour per 20 worked | 104 h | 13.0 |
| 1 hour per 26 worked | 80 h | 10.0 |
| 1 hour per 30 worked | 69.33 h | 8.7 |
| 1 hour per 40 worked | 52 h | 6.5 |
| 1 hour per 52 worked | 40 h | 5.0 |
Part-time staff on the same rule earn less in total. At 20 hours a week, 1 hour per 30 worked comes to 34.67 h a year, 1.33 h per paycheck. Whether overtime hours also earn PTO is set by the employer's policy.
PTO for Salaried Employees
Salaried employees usually get a yearly PTO grant in hours or days, spread over the paychecks of the year. Exempt staff often do not track hours, so a per-hour rule fits them poorly.
A grant of 15 days, or 120 hours, accrues 4.62 h per paycheck on a biweekly schedule and 10.00 hours a month. At a pay rate of $30 an hour the full year of PTO is worth $3,600.
To find the hourly rate behind a salary, divide it by 2,080 hours, or use the Salary to Hourly Calculator.
PTO Balance by Date
A PTO balance on a future date is the current balance plus the accrual for every pay period until then, minus the hours you plan to use. The calculator shows the accrual for common spans.
| After | PTO hours earned | Workdays |
|---|---|---|
| 1 pay period | 2.67 | 0.33 |
| 1 month | 5.78 | 0.72 |
| 6 months | 34.67 | 4.33 |
| 1 year | 69.33 | 8.67 |
The table uses 1 hour per 30 hours worked at 40 hours a week. Planning a week off in 6 months? Add the 6-month figure to today's balance and check it covers 40 hours.
PTO Caps, Rollover and Use It or Lose It
Most PTO policies either cap the balance or let unused hours roll over into the next year. Federal law sets no rule, so the policy and state law decide.
- Accrual cap: once the balance reaches the cap, new hours stop accruing until you use some.
- Rollover limit: only part of the balance carries into the new year.
- Use it or lose it: the balance expires on a set date. California does not allow earned vacation to be taken away this way, though a cap on accrual is allowed.
Paid sick leave is a separate benefit in many states and cities, often with its own accrual and carryover rules.
PTO Buyout and How PTO Is Taxed
PTO used as time off is taxed as regular wages on the paycheck; PTO cashed out in a lump sum is a supplemental wage. A buyout, or buyback, is a policy where the employer pays for unused hours while you stay employed.
A cash-out of 40 hours at $30 an hour is $1,200 gross. With the 22% federal flat rate, $264 of federal tax is withheld, plus $91.80 of Social Security and Medicare.
The Severance Pay Calculator handles a final payout that also includes severance.
Frequently Asked Questions
How is PTO calculated?
PTO is calculated by multiplying hours worked by the accrual rate. At 1 hour per 30 hours worked, 80 hours of work earn 2.67 hours of PTO.
How many days is 20 hours of PTO?
20 hours of PTO is 2.5 days at 8 hours a day.
How do you calculate a PTO payout?
You calculate a PTO payout by multiplying unused PTO hours by the hourly rate. 40 hours at $28 an hour is a $1,120 payout before tax.
How much PTO do I earn per biweekly paycheck?
You earn your yearly PTO divided by 26 on a biweekly schedule. At 1 hour per 30 worked and 40 hours a week, that is 2.67 h per paycheck.
Is PTO required by law?
No. No federal law requires paid time off for private employers. Several states and cities do require paid sick leave.
How is PTO calculated for salaried employees?
PTO for salaried employees is usually a yearly grant divided across the pay periods. 120 hours a year accrue 4.62 h per paycheck on biweekly pay.
Does unused PTO roll over to next year?
It depends on the employer's policy and state law. Many plans allow a set number of hours to roll over or cap the balance instead.
How is PTO taxed when it is paid out?
A PTO payout is taxed as a supplemental wage: 22% federal withholding plus 7.65% Social Security and Medicare, and state tax where it applies.