How PTO accrual works
Many employers do not hand out vacation on January 1. Instead, paid time off accrues: you earn a little with every paycheck or every hour worked, and you can use what you have earned. Knowing your accrual rate tells you when you can afford a trip and what your unused days are worth if you change jobs. This calculator converts a yearly allowance into hours per pay period and per hour worked, then tracks your balance.
The formulas
- Hours per pay period = PTO days per year × hours per day ÷ pay periods per year.
- Hours per hour worked = PTO hours per year ÷ (hours per week × 52).
- Accrued so far = pay periods worked × hours per pay period.
- Balance = accrued + carryover − days used.
- Value of one day = salary ÷ (hours per week × 52) × hours per day.
Worked example: 15 days a year, paid every two weeks
- 15 days × 8 hours = 120 hours a year. 120 ÷ 26 = 4.62 hours per paycheck.
- Per hour worked: 120 ÷ 2,080 = 0.0577 hours, about 1 hour of PTO for every 17 hours of work.
- After 13 paychecks, half the year: 13 × 4.62 = 60 hours, or 7.5 days.
- With 4 days already taken, the balance is 3.5 days.
- At $65,000 a year, one day is worth $250, so the balance is worth $875.
Balance through the year
| Paychecks worked | Accrued | Balance (4 days used) | Value |
|---|---|---|---|
| 4 | 2.3 days | −1.7 days | $0 |
| 8 | 4.6 days | 0.6 days | $154 |
| 13 | 7.5 days | 3.5 days | $875 |
| 20 | 11.5 days | 7.5 days | $1,885 |
| 26 | 15.0 days | 11.0 days | $2,750 |
What the law says
There is no federal requirement for paid vacation in the United States, so most rules come from employer policy and state law:
- Payout on leaving. Some states, including California, Colorado, Montana, Nebraska and Massachusetts, treat accrued vacation as wages that must be paid when employment ends. Many others follow the written policy.
- Use-it-or-lose-it. Several states, California among them, prohibit forfeiting earned vacation, though employers may cap accrual. Elsewhere, unused days can expire if the policy says so.
- Paid sick leave. A growing number of states and cities require sick leave, commonly 1 hour for every 30 hours worked, up to 40 to 56 hours a year. It is usually tracked separately from vacation and rarely paid out.
Tips
- Check your pay stub. Most payroll systems print accrued, used and available hours.
- Plan around caps. If your plan stops accruing at a maximum balance, schedule time off before you hit it.
- Count holidays separately. Paid holidays are usually on top of PTO.
- Unlimited PTO has no balance and usually no payout when you leave.