A PTO payout converts eligible unused paid time off into cash. The basic idea is simple: determine how many PTO hours are eligible, determine the hourly value of those hours, and multiply the two. The calculator above supports both hourly and salaried employees and can optionally estimate withholding so you can compare gross and estimated net payout.

How to use the PTO Payout Calculator

1. Choose whether you are paid hourly or receive an annual salary.
2. Enter the unused PTO hours that are actually eligible for payout under your employer’s policy.
3. Enter your hourly rate, or enter annual salary and normal weekly hours.
4. If your policy pays less than 100% of eligible PTO value, adjust the payout percentage.
5. Choose whether to estimate federal withholding, FICA, and state/local withholding.
6. Review gross payout, estimated deductions, net estimate, and PTO days.

PTO payout formula for hourly employees

For an hourly employee, the basic payout formula is:

Gross PTO payout = Eligible PTO hours × Hourly rate × Eligible payout percentage

Example: 80 eligible PTO hours × $30 per hour × 100% = $2,400 gross PTO payout.

PTO payout formula for salaried employees

For salaried employees, first convert annual salary into an hourly equivalent using the employee’s normal workweek:

Estimated hourly value = Annual salary ÷ 52 ÷ Normal weekly hours

Then multiply that hourly value by eligible PTO hours and the eligible payout percentage.

Example: $78,000 ÷ 52 ÷ 40 = $37.50 per hour. If 80 PTO hours are eligible, the gross payout estimate is $3,000.

This approach is more flexible than assuming every salaried employee automatically works 2,080 hours per year. If your employer uses a different payout formula, use the employer’s written method.

How to convert PTO hours to days

PTO days = PTO hours ÷ Hours in a normal workday

For an 8-hour day, 80 PTO hours equals 10 workdays. For a 10-hour day, the same balance equals 8 workdays. The cash value still depends on the payout rate, not just the number of days.

PTO payout vs PTO accrual

These are different calculations. PTO accrual answers how much paid time off you have earned or are expected to earn. PTO payout answers how much eligible unused PTO may be worth in cash.

If you first need to determine how many hours you have earned, use the PTO Accrual Calculator. Then return here with the eligible unused balance to estimate its cash value.

Is PTO payout taxable?

Unused vacation or PTO paid as cash is generally wage income and is subject to payroll withholding. IRS Publication 15 explains that vacation pay is subject to withholding and that an annual lump-sum payment for unused vacation leave paid in addition to regular wages can be treated as a supplemental wage payment.

For 2026, the IRS supplemental-wage percentage method remains 22% when that method applies. Employers may also use other permitted withholding methods depending on how the payment is made and the employee’s circumstances. That is why the calculator labels 22% as an estimated federal withholding method, not as your final tax rate.

Official source: IRS Publication 15 (2026).

Why the net PTO payout can be lower than expected

The amount deposited may be lower than the gross PTO value because payroll can withhold federal income tax, Social Security, Medicare, and applicable state or local taxes. Your final tax liability can still be different from the amount withheld.

The calculator’s FICA option uses a simple employee-side estimate of 6.2% Social Security plus 1.45% Medicare. Actual payroll tax can differ because Social Security has an annual wage base and Medicare can have additional rules at higher wages. If you are already near a payroll-tax threshold, the estimate may not match your actual check.

For a broader recurring-paycheck estimate, use the Paycheck Calculator with Taxes.

Is an employer required to pay unused PTO?

There is no single federal rule requiring every private employer to provide or cash out vacation or general PTO. The U.S. Department of Labor states that the Fair Labor Standards Act generally does not require payment for time not worked, such as vacation, sick leave, or holidays. These benefits are usually created by employer policy, agreement, or other applicable rules.

State and local law can add requirements, and the answer may change depending on whether the employee quits, is terminated, retires, or receives a voluntary year-end cash-out. Always check the current employer policy and the law that applies to the specific worker and location.

Official federal baseline: U.S. Department of Labor personal leave guidance.

PTO payout when quitting or leaving a job

When employment ends, unused PTO may be handled separately from regular wages and severance. Some employers pay all eligible unused vacation, some pay only specific leave banks, and some policies limit what is eligible subject to applicable law.

Use this calculator only after identifying the balance that is actually eligible for payout. If you are also receiving severance, estimate that separately with the Severance Pay Calculator.

Voluntary PTO cash-out or sell-back programs

Some employers allow employees to cash out or sell back a portion of unused PTO while they are still employed. A plan may limit the number of hours eligible, require a minimum remaining balance, use a specific election window, or pay at less than 100% of regular value.

If your plan pays only part of the normal cash value, use the eligible payout percentage field. For example, if 80 hours are eligible but the program pays 75% of value, enter 75%.

PTO payout and use-it-or-lose-it policies

A use-it-or-lose-it policy generally means unused leave can expire under the employer’s rules. Whether that type of policy is allowed, limited, or affected by payout requirements can depend on the jurisdiction. Do not assume that an expiring PTO balance automatically has a cash payout value.

What if I used more PTO than I earned?

Some employers allow a negative PTO balance, meaning the employee used time before fully earning it. A negative balance can affect a final paycheck or separation calculation depending on the employer’s policy and applicable law. This calculator is designed for positive eligible unused PTO, so it does not subtract negative PTO debt from final wages.

PTO payout vs severance pay

PTO payout and severance are separate concepts. PTO payout converts eligible unused leave into cash. Severance is compensation connected with employment separation and may be based on salary, tenure, company policy, or a negotiated agreement.

A separation package can include both, but one does not automatically replace the other. See Average Severance Package for broader context on separation compensation.

PTO payout example

Assume an hourly employee has 64 eligible unused PTO hours and earns $28 per hour:

• Gross payout: 64 × $28 = $1,792
• Federal withholding estimate at 22%: $394.24
• Simple Social Security estimate at 6.2%: $111.10
• Simple Medicare estimate at 1.45%: $25.98
• Estimated net before any state/local withholding: about $1,260.68

This is only an illustration of withholding. The employee’s actual payroll and final tax result may differ.

Common PTO payout mistakes

• Using total PTO instead of eligible PTO: Some leave banks or hours may not be eligible for cash-out.
• Assuming salary always means 2,080 hours: Use the normal workweek or the employer’s stated payout formula.
• Treating 22% as the final tax rate: It is a possible federal withholding method, not the employee’s final tax liability.
• Ignoring state or local withholding: Additional withholding may apply.
• Assuming every employer must pay unused PTO: Entitlement depends on policy and applicable law.
• Combining PTO payout with severance: They should usually be calculated as separate components.

Frequently asked questions

How do I calculate my PTO payout?

Multiply eligible unused PTO hours by the hourly value of the employee’s pay, then apply any eligible payout percentage. For a salaried employee, the hourly value can be estimated by dividing annual salary by 52 and then by normal weekly hours.

How much is 80 hours of PTO worth?

At $30 per hour, 80 eligible PTO hours are worth $2,400 gross if the employer pays 100% of value. At $25 per hour, the same 80 hours are worth $2,000 gross.

Is PTO payout taxed at 22%?

Not necessarily. A lump-sum unused vacation payment can be treated as supplemental wages, and 22% is one federal withholding method that may apply. The actual withholding method and final tax liability can differ.

Does PTO payout include Social Security and Medicare taxes?

PTO paid as wages can be subject to payroll taxes. The calculator can show a simple Social Security and Medicare estimate, but annual wage bases and additional Medicare rules can change actual withholding.

Do I get unused PTO paid out if I quit?

It depends on the employer’s policy and the law that applies where you work. Federal law does not create a universal PTO payout requirement for private employers, while state or local rules may add obligations.

Is PTO payout the same as a final paycheck?

No. PTO payout can be one component of final compensation, alongside regular wages and other amounts. Final-pay timing and required components can vary by jurisdiction.

Can salaried employees receive a PTO payout?

Yes, if the employer’s plan and applicable law provide for it. The employer may use an hourly equivalent derived from salary or another formula stated in the plan.

Estimate your unused PTO payout

Use the calculator at the top with the unused balance that is actually eligible for payout, your regular pay basis, and the payout percentage from your employer’s policy. Turn tax estimates on or off depending on whether you want a gross-only or estimated-net result.

This calculator provides a general planning estimate and is not legal, tax, payroll, HR, or employment advice. Employer policies and federal, state, and local rules can change the amount owed, how it is paid, and how it is withheld.