How does a PTO payout work?
A PTO payout is cash paid in place of unused paid time off. When you leave a job, or sometimes at year end, depending on your employer's policy, hours you haven't taken can be paid at your regular rate instead of disappearing. This PTO payout calculator turns your unused hours or days into that dollar figure, using your actual rate of pay, and lets you model a payout cap and an estimated take-home amount.
How to calculate PTO payout
To calculate PTO payout by hand, work through it in four steps:
- Find your hourly rate. If you're paid a salary, divide it by 2,080, which is a standard 40 hour week across 52 weeks.
- Count your unused PTO. If your balance is in days, multiply by the hours in your workday to get hours.
- Apply any cap. If your employer limits how much is paid out, use the lower of your balance and the cap.
- Multiply the paid hours by your hourly rate. That's your gross payout, before any taxes or deductions.
Calculating PTO payout this way is exactly what the calculator does, and it shows the hourly rate and the hours it used so you can check each step against your own numbers. Your employer may use a different method to turn a salary into an hourly rate, so treat the result as an estimate.
A quick example
Say you earn $25 an hour and have 30 unused PTO hours when you leave. That's a gross payout of $750. A $52,000 salary converts to the same $25 an hour, so the result would match. If your employer caps payouts at 24 hours instead, you'd receive $600, because the extra 6 hours wouldn't be included. The same method scales: 120 unused hours at $25 an hour comes to $3,000 gross.
PTO cash out and unused PTO
Cashing out PTO means being paid cash for time off you haven't used. Some employers let you cash out PTO while you're still employed, some only pay it out when you leave, and some don't pay it out at all, so a PTO cashout isn't automatic. Whether unused PTO can be paid out, and when, depends on your employer's policy, your employment agreement and the law where you work. This tool works as a PTO cash out calculator for any of those situations: enter the hours your policy would actually pay for, and it shows the value.
If you're leaving a job, you may also want to estimate pay with the Severance Pay Calculator, since severance is separate from a PTO payout. Extra hours you worked before leaving are separate again, and the Overtime Pay Calculator can help with those.
PTO payout taxes
A PTO payout is generally treated as pay, so taxes and payroll withholding usually apply to it. In the United States, for example, it's typically handled as a supplemental wage, which means your employer can withhold on it differently than on a regular paycheck, such as using a flat percentage or combining it with your regular pay for the period. That's why there's no single PTO payout tax rate that fits everyone, and why the honest answer to how much a PTO payout is taxed is that it depends.
Taxes on a PTO payout, and the amount actually withheld, depend on where you live, your income, your payroll setup and how your employer processes the payment. To see roughly what you'd keep, turn on the take-home estimate in Advanced mode and enter your own estimated tax and deduction rate. It works like a simple PTO payout tax rate calculator in one respect: it doesn't work out your rate, it applies the one you enter. The 25% that appears there is only a placeholder, not a tax rate, so replace it with your own figure. Your pay stub, your payroll team or a tax professional can tell you what applies to you.
PTO payout caps
A PTO cap can mean two different things. An accrual or balance cap limits how much time off you can build up, so your balance already reflects it. A payout cap limits how much of your balance is actually paid in cash, and anything above it is typically forfeited or simply not included. This calculator's cap models the second kind: turn on "My employer caps how much PTO gets paid out" in Advanced mode, enter the limit in hours or days, and only the capped amount is used. Only turn it on if your employer really has one.
Vacation payout vs PTO payout
Employers use different terms for paid time off. Some keep a single PTO bank that covers vacation, sick days and personal days, while others track vacation separately and may only pay out vacation. Payout rules can differ between these types of leave, so don't assume your employer treats them the same. The calculator values whichever hours your policy pays out, which means you can use it as a vacation payout calculator by entering only your unused vacation hours.
Frequently asked questions
How much is PTO payout taxed?
There's no single rate. In the US, a PTO payout is typically treated as a supplemental wage, and your employer may withhold on it using a flat percentage or by combining it with your regular pay, which can give different results. What's withheld also depends on where you live, your income and your payroll setup, and your final tax bill depends on your full-year situation, not just the withholding on that one payment. Use the take-home estimate to try your own rate, and check your pay stub or a tax professional for what applies to you.
Can you cash out PTO?
Sometimes. Whether you can cash out PTO depends on your employer's policy, your employment agreement and the law where you work. Some employers allow it while you're still employed, some only pay out unused PTO when you leave, and some don't pay it out at all. Check your employee handbook or ask HR, then enter the hours your policy would pay for to see what it's worth.
Can you cash out PTO at any time?
Not necessarily. Many employers only allow cashing out PTO at set times, such as at year end, during an open window, or when employment ends, and some don't allow it at all. Some require unused time to be taken as time off instead. Your employer's policy decides, so confirm the timing and any limits with HR before you plan around a payout.
Am I actually owed a payout for unused PTO?
It depends. Whether you're owed a payout can turn on your employer's written policy, your employment agreement, the law where you work, and the circumstances of how your employment ends. Some places treat accrued vacation as earned pay, others leave it to the employer's policy, and some allow "use it or lose it" rules. Check your employee handbook or your local labor department rather than assume either way.
Why would my employer cap the payout?
Some policies let you carry over or bank unused time up to a limit, and anything earned beyond that limit either gets forfeited or simply isn't included in a payout. It's a policy choice, not something this calculator decides for you, so only turn the cap on if you know your employer actually has one.
How accurate is the take-home estimate?
Only as accurate as the percentage you enter. Real withholding on a PTO payout depends on your location, your total income for the year, and your employer's payroll system, none of which this calculator knows, and the 25% that appears by default is a placeholder, not a tax rate. Treat the net figure as a rough guide, not a paycheck prediction.
Can I use my salary instead of an hourly rate?
Yes. Switch "I know my" to annual salary, and it converts to hourly using a standard 2,080 hour work year (40 hours a week for 52 weeks), the same convention used across our other pay calculators.
Does this include sick time or only vacation?
That depends on how your employer structures time off. Some combine vacation and sick time into one PTO bank that gets paid out together, others keep them separate with only vacation being payable. Enter whatever your policy actually pays out for.
How do you calculate vacation pay for salaried employees?
Divide the annual salary by the hours you work in a year to get an hourly rate, then multiply by your unused vacation hours. With a standard 40 hour week that's 2,080 hours, so a $52,000 salary works out to $25 an hour, and 40 unused vacation hours would be worth $1,000. Some employers use a daily rate instead, or base the figure on your actual scheduled hours, so your result may differ slightly. Switch the calculator to annual salary and it does the conversion for you.
How is paid time off calculated?
Two different things get called that. How much PTO you earn is set by your employer, often as a number of hours for each hour worked or each pay period. What unused PTO is worth is calculated by multiplying the hours by your hourly rate. This calculator handles the second part, so enter your current balance from your pay stub or HR system rather than expecting it to work out how much you've accrued.