PTO Payout Calculator
The balance, the rate and what the payout is taxed at
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Planning indicator only. It does not assess every part of a household's finances or replace individualized professional advice.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the accrued PTO or vacation hours showing on your final pay stub — the number the payroll system will actually cash out, not what you think you earned.
- 02
Enter your final hourly rate. If you are salaried, leave it blank and put your annual salary in Advanced options instead; the page divides it by the 2,080 hours already sitting in that panel.
- 03
Set the share of the balance your employer pays out. It opens at 100% because that is what a mandate state or an ordinary policy produces — set it to 0% where a written forfeiture clause applies, or to anything between for a policy that pays a fraction.
- 04
Enter the hours you accrue each pay period, how many pay periods a year you have (26 biweekly, 24 semi-monthly, 12 monthly) and your accrual cap if there is one. Those three drive the projection table, and the cap is the line that quietly stops a balance growing.
- 05
Enter the wages already paid to you this year, your federal bracket and your state supplemental rate, then read the net payout, the gap against your real bracket, and the table showing where the balance goes from here.
Formula
Hourly rate = the rate you entered, or annual salary ÷ hours per year (2,080 full time) when the hourly field is blank. Payable hours = accrued hours × the payable share. Gross payout = payable hours × rate. Forfeited value = (accrued hours − payable hours) × rate. Withholding is the supplemental stack, measured on the year rather than on the payment: federal at the flat 22% (37% on anything above $1,000,000 of supplemental wages for the year); Social Security at 6.2% of whatever slice of the payout is still under the $184,500 wage base once this year's wages are stacked underneath; Medicare at 1.45% with no ceiling; the 0.9% Additional Medicare Tax on any part above $200,000 from this employer; and your state supplemental rate on the whole payment. Net = gross − all of it. The gap = federal withheld − gross × your real bracket. The projection then reads the same inputs forward: each pay period adds your accrual hours, and where a cap is set the balance stops there and the excess is never earned.
Example
96 accrued hours at a final rate of $38.00, the whole balance payable, accruing 4.62 hours across 26 pay periods a year with no cap, $74,000 of wages already paid this year and a 22% bracket. The gross is $3,648 — twelve working days. The flat 22% withholds $803 and FICA takes $279 ($226 of Social Security, with $110,500 of room still under the wage base, plus $53 of Medicare), so $2,566 lands. Because the bracket and the flat rate are both 22% the gap is exactly $0, which is the one case where the supplemental rate is harmless. Change the bracket to 32% and nothing about the cheque moves — still $803 withheld — but the real tax becomes $1,167 and $365 is due at filing. Add a 120-hour accrual cap and the projection turns: the balance reaches the ceiling in about 6 pay periods, then flatlines at 120 hours while you keep working, losing 31.4 hours over the year — $1,195 of pay you never earn. Set the payable share to 50% instead and the gross halves to $1,824 with $1,824 of value forfeited outright.
Definitions
- Accrued PTO
- Hours of paid leave you have already earned and not yet taken, as carried on the payroll system. In several states accrued vacation is treated as earned wages, which is what makes a payout mandatory there.
- Payable share
- The portion of the balance your employer actually cashes out at separation. It carries the whole state-and-policy rule as one number: 100% where the law or the policy requires payout, 0% where a written forfeiture clause applies.
- Accrual cap
- The balance at which you stop earning new hours. Distinct from use-it-or-lose-it, which erases hours already banked; a cap means hours are never credited in the first place.
- Use-it-or-lose-it
- A policy that wipes an unused balance at a date. California, Colorado, Montana and Nebraska bar it outright because vacation vests as it is earned; most other states permit it with clear written notice.
- Final rate
- The hourly rate in force on your last day, which is what a payout is priced at rather than the rate you were on when the hours were earned. California codifies this at Labor Code 227.3.
Good to know
No federal rule, about twenty state rules, and a policy that governs the rest
The Fair Labor Standards Act does not require an employer to provide paid vacation at all, and having required nothing it cannot require paying anything out. Every rule about a PTO payout is therefore state law or contract, which is exactly why this page carries the whole question as a single payable-share field rather than pretending to look your state up. Roughly twenty states plus the District of Columbia treat accrued, unused vacation as earned wages that must be paid at separation; California, Colorado, Illinois, Indiana, Louisiana, Maine, Massachusetts, Nebraska and North Dakota are the jurisdictions named most consistently across compilations, and counts range from about nineteen to twenty-six depending on how partial and conditional rules are scored. Four of them — California, Colorado, Montana and Nebraska — go further and bar use-it-or-lose-it outright, on the reasoning that vacation vests as it is earned and cannot be taken back. Everywhere else the employer's written policy controls, and a clear forfeiture clause communicated in advance is generally enforceable. There is a catch inside the mandate states that trips up a lot of people who think they are protected: the obligation usually runs to the vacation the employer actually promised, not to a freestanding entitlement. An employer that grants no vacation owes no payout even in California. What those states forbid is granting it, letting it accrue, and then erasing it. Two further wrinkles are worth knowing. Sick leave is frequently treated differently from vacation and is often not payable at all, while a merged PTO bank that covers both is usually treated in its entirety as vacation — so merging can be more generous than it looks. And the deadline for the final cheque is entirely state law, ranging from immediate on discharge in California, through 72 hours, to the next regular payday, which is the most common rule; California adds a waiting-time penalty of up to 30 days' wages when an employer misses it.
Why the cheque is smaller than the pay stub arithmetic
Multiply your hours by your rate and you get a number. The payout is always less, and the reason is a withholding method rather than a tax rate. A PTO payout is supplemental wages, so it does not go through your W-4 and the normal withholding tables; payroll takes the flat 22% supplemental rate, plus Social Security and Medicare, plus whatever your state charges. On 96 hours at $38.00 the gross is $3,648, the flat rate takes $803, FICA takes $279, and $2,566 lands — about 70% of the arithmetic you did on the pay stub. Nothing about that is a penalty. It is a payment on account, and whether it is too much or too little depends entirely on your own bracket. At a 22% bracket the flat rate and the real rate coincide and the gap is exactly zero, which is the case where the supplemental method is harmless. At 32% the withholding does not change — still $803 — but the real federal tax on the money is $1,167, so $365 is quietly deferred to April. At 12% the reverse happens and the excess comes back as refund. This is worth planning for rather than discovering, particularly because a payout usually arrives in the same final cheque as severance and any final bonus, all of them supplemental, all of them stacked on a year of ordinary wages. If the shortfall is material there are two ordinary fixes: revise your W-4 at your next employer for the remainder of the year, or make an estimated payment for the quarter in which the money was received, since interest on an underpayment runs from that quarter rather than from the filing deadline. One thing the flat rate does not change is the payout's character: it is wages, it appears on your W-2, and it counts in full toward your Social Security earnings record for the year.
Accrual, the cap, and the forfeiture nobody announces
The projection table on this page reads the same inputs forward rather than backward, and it exists for one reason: an accrual cap converts unpaid work into nothing at all, and no pay stub announces it. Start with the arithmetic of the accrual itself. Accruing 4.62 hours in each of 26 biweekly pay periods is 120 hours a year — fifteen working days, which is a fairly standard three weeks. A semi-monthly employee on 24 periods needs 5.00 hours a period for the same result, and a monthly one needs 10.00, which is why the pay-periods field matters more than it looks. Now add a ceiling. A cap is not the same thing as use-it-or-lose-it: use-it-or-lose-it erases hours you already banked, while a cap means the hours are never credited in the first place. That distinction is why the two are drafted differently and why capped accrual is a common policy design even at employers whose written rules never wipe a balance — but the practical effect on you is identical, and invisible on the payslip. Start at 96 hours, accrue 4.62 a period against a 120-hour cap, and you reach the ceiling in about six pay periods. From then on the balance sits still while you keep working: over the following twelve pay periods the projection loses 31.4 hours, worth $1,195 at $38.00 an hour, and there is no line anywhere reporting it. The response is to schedule leave before the ceiling rather than after, and to check whether your policy allows an elective cash-out. Many do not, and one reason employers commonly restrict elective cash-outs is a tax concern rather than meanness: giving employees a free choice between leave and cash raises constructive-receipt questions for everyone holding the choice, which is why the cash-out programmes that do exist usually require an irrevocable election made in the prior year.
Final rate, FICA, and when the payout lands
A payout is priced at your FINAL rate, not the rate you were on when the hours were earned. California writes that into statute at Labor Code 227.3 and most policies follow the same logic, which makes an accrued balance quietly appreciating property: hours banked three raises ago cash out at today's rate. It cuts the other way after a pay cut or a move to a lower-paid role, and it is one reason a balance is often worth carrying into a raise rather than burning ahead of one. Social Security and Medicare come out of the payout the same as any other wages, $279 on the worked example, with no exception for accrued leave. The one thing that changes that figure is the wage base. Only the slice of the payout still under $184,500 of wages for the calendar year carries the 6.2%, so someone leaving in December who has already cleared the base pays Medicare on the payout and nothing else — worth several hundred dollars on a substantial balance, and a genuine argument for the timing of a separation date where you have any say in it. Timing matters in a second way. A payout that lands in January falls in the following tax year, with a fresh wage base, a fresh $1,000,000 supplemental threshold and possibly a much lower bracket if you will be out of work for part of that year. That is the single largest planning lever available on a payout and it costs nothing but a conversation about the effective date. Finally, check what your state does with a payout for unemployment purposes. A few treat it the way they treat severance and allocate it to the weeks it covers, postponing benefits accordingly; it is state law, it is not certified here, and it can differ from that same state's treatment of severance. Take the net figure to the layoff runway page, which schedules it against the months ahead.
Frequently asked questions
Is a PTO payout taxed at a higher rate?
No. It is taxed at exactly your ordinary rate like every other dollar of wages. It is WITHHELD at a higher rate, and the two get confused constantly. A payout is supplemental wages, so payroll takes a flat 22% instead of running it through your W-4, and on a $3,648 payout that is $803. If your bracket is also 22% the two match and nothing is owed either way. If your bracket is 32%, the real tax is $1,167 and you are $365 short at filing — the same payout, the same withholding, a bill that only appears in April.
Does my employer have to pay out my unused vacation?
There is no federal rule at all. The Fair Labor Standards Act does not require paid vacation, so it cannot require paying it out. Roughly twenty states plus the District of Columbia treat accrued, unused vacation as earned wages that must be paid at separation, and California, Colorado, Illinois, Indiana, Louisiana, Maine, Massachusetts, Nebraska and North Dakota are the ones named most consistently. Four — California, Colorado, Montana and Nebraska — go further and bar use-it-or-lose-it outright. Everywhere else the employer's written policy controls, and a clear forfeiture clause is generally enforceable. That whole rule is the payable-share field on this page.
I am in California. Does that guarantee a payout?
Only of vacation the employer actually promised. This is the catch inside every mandate state: the obligation runs to the policy, not to a freestanding entitlement, so an employer that grants no vacation owes no payout even in California. What those states forbid is granting vacation, letting it accrue, and then taking it back. It is also worth knowing that many policies and some statutes treat sick leave differently from vacation, and a PTO bank that merges the two is usually treated as vacation in its entirety.
Is the payout priced at my old rate or my current one?
Your final rate. California writes it into statute at Labor Code 227.3 and most policies follow the same logic, so hours banked three raises ago cash out at today's rate — 96 hours at $38.00 is $3,648 however long ago they were earned. It cuts the other way after a pay cut, and it is one reason a balance is often worth carrying rather than burning ahead of a raise.
What is an accrual cap and how much is it costing me?
A ceiling on the balance at which you simply stop earning hours. It is not a forfeiture of hours you already have — it is hours you never receive, which is why nothing on a pay stub announces it. Start at 96 hours accruing 4.62 a period against a 120-hour cap and you reach the ceiling in about 6 pay periods; over the following year the projection loses 31.4 hours to it, worth $1,195 at $38 an hour. Leave the cap field at 0 and the table just keeps adding hours forever, which is the right answer only if your policy really has no ceiling.
Do Social Security and Medicare come out of a payout?
Yes. There is no exception for accrued leave — it is wages, so 6.2% and 1.45% apply exactly as they do to salary, $279 on a $3,648 payout. The one thing that changes it is the Social Security wage base: once the wages already paid to you this year reach $184,500, only the slice of the payout still under that ceiling carries the 6.2%. The payout also counts toward your Social Security earnings record for the year, which the flat withholding rate does not change.
Can a payout delay my unemployment benefits?
In some states, yes — a few treat a vacation payout the way they treat severance and allocate it to the weeks it covers, postponing benefits for that period. It is state law and it is not certified here. Since the payout usually lands in the same final check as severance, the practical move is to price both, then check what the paying agency does with each, because the answer can differ for the two even inside the same state.