United States · Paid time off

PTO payout calculator

The value of unused paid time off is simple arithmetic — unused hours × your final hourly rate. Whether your employer must actually pay it is not arithmetic at all: it depends on your state's law and your employer's policy, and the answers split sharply by state. This page does the valuation honestly, then points you to the state-by-state rule that decides whether the number is money owed or money lost.

The formula, and a worked example

Every payout regime that exists — statutory or contractual — prices unused leave the same way: the balance of earned, unused hours, valued at the employee's final rate of pay. Illinois's wage law, to take one clear example, requires "the monetary equivalent of all earned vacation" as part of final compensation, figured at the final rate. So an employee leaving with 37.5 unused hours at a final rate of $32.50 is looking at 37.5 × $32.50 = $1,218.75 gross. If you are salaried, the calculator first converts the salary to an hourly rate on your schedule (a $65,000 salary on a 37.5-hour week is $33.33 an hour, so 45 unused hours are worth $1,500.00). If you are still building the balance rather than cashing it out, the PTO accrual calculator projects how it grows.

Whether it is owed: the three kinds of states

States that require payout. In California, Colorado, Illinois, Louisiana, Maine, Massachusetts, Montana, Nebraska, North Dakota and Rhode Island, earned vacation is treated by law as wages, and the unused balance must be paid at separation (the details and exceptions are in the state guide). States where silence means payment. In Maryland, New Hampshire, New York and North Carolina — and, under its labour department's guidance, Indiana — the employer's policy controls, but if the policy does not clearly forfeit the balance, the default runs in the employee's favour. States where policy governs outright. In the remaining states, the written policy or agreement decides, and a clear "no payout at separation" clause is generally enforceable. The practical lesson: read the handbook's separation clause before your last day, because in most of the country that clause is the whole case.

How a payout is taxed

A payout is wages for tax purposes — there is no special "vacation money" treatment. The IRS's Publication 15 lists an annual lump-sum payment for unused vacation leave among supplemental wages, the same category as bonuses and severance. That classification drives withholding: if the payout is made separately from regular wages, the employer may withhold federal income tax at the flat 22% supplemental rate (or use the aggregate method instead), and Social Security and Medicare taxes apply on top regardless of the method chosen. The withheld amount is not your final tax — it settles up on your tax return — but it is why a $1,218.75 payout does not arrive as $1,218.75.

When it has to be paid

Where a payout is owed, it usually rides on the final paycheck, and final-paycheck deadlines are themselves state law. Illinois again gives a clean example: final compensation is due at the time of separation if possible, and otherwise by the next regularly scheduled payday. Other states set their own deadlines, and some distinguish between employees who are discharged and employees who resign. If the deadline passes with no payment, state labour agencies generally run a wage-claim process — that, not a new negotiation with your former manager, is the usual first step.

Common questions

Is the payout figured at my final rate or the rate when I earned the hours?

At the final rate, in the states that mandate payout — California's and Illinois's rules both say so expressly. A policy-based payout follows whatever the policy says, which is usually the final rate as well.

Can my employer make me use the hours instead of paying them?

Before separation, generally yes — employers may schedule leave. At separation, in the states where the balance is wages, the employer cannot retroactively convert owed wages into time off you no longer have.

Does sick leave get paid out too?

Far less often. Most state rules and policies that protect vacation do not extend the same treatment to sick leave, and combined "PTO" banks are treated according to how the policy defines them — one more reason the handbook's definitions matter.

What if my employer says the hours "expired"?

In forfeiture-proof states like California, earned vacation cannot expire out from under you, though accrual can be capped. Elsewhere, an expiry clause that was clearly communicated is usually enforceable — the state guide shows which side of that line your state is on.

Image credits

The coins-in-hand photograph is by Adriana Hidalgo Zamora, via Wikimedia Commons, license CC BY-SA 3.0. The ATM photograph is by 3dman_eu, via Wikimedia Commons, license CC0. The agenda-and-pencil photograph is by Philippe Alès, via Wikimedia Commons, license CC BY-SA 4.0. All three were already in this site's licensed collection; all were converted to WebP and resized. No image on this page was generated by AI.

Sources

• IRS Publication 15 (2026), section 7 — supplemental wages, including lump-sum payments for unused vacation leave (irs.gov/publications/p15)
• U.S. Department of Labor — Vacations: benefits are matters of agreement under the FLSA (dol.gov/general/topic/benefits-leave/vacation_leave)

State rules summarised on this page are set out in full, state by state with their official sources, in the companion guide: PTO payout laws by state. The calculator's formula — unused hours at the final rate — is the formula the cited wage laws use. Expected outputs were derived independently of the code and the engine is tested against them.