A PTO payout is the money paid for unused paid time off, usually when you leave a job. It equals your unused PTO hours times your hourly rate. Enter your balance in hours or days and your hourly rate or salary to see the gross payout, and add the withholding percentage from a pay stub to estimate what you take home.
$1,000.00 gross payout
- Hours paid out
- 40
- Hourly rate used
- $25.00
- Withholding (your %)
- —
- Estimated after withholding
- —
40 hours of unused PTO at $25.00 an hour is a payout of $1,000.00 before taxes.
How it’s calculated
PTO payout = unused PTO hours × hourly rate. Days are turned into hours with your usual workday; a salary is turned into an hourly rate as salary ÷ (hours per week × 52). Some employers use a different divisor (for example 2,080 hours), or pay out only part of the balance — use the figures from your policy.
Whether unused PTO must be paid out when you leave depends on your state’s law and your employer’s written policy; federal law does not require it. A payout is taxable wages, usually withheld as supplemental wages — see IRS Publication 15 for the methods your employer may use.
Worked example with your numbers
- Gross payout: 40 hours × $25.00 = $1,000.00.
| Unused PTO | Gross payout |
|---|---|
| 8 hours (1 days of 8 h) | $200.00 |
| 16 hours (2 days of 8 h) | $400.00 |
| 24 hours (3 days of 8 h) | $600.00 |
| 40 hours (5 days of 8 h) | $1,000.00 |
| 80 hours (10 days of 8 h) | $2,000.00 |
| 120 hours (15 days of 8 h) | $3,000.00 |
When is unused PTO paid out?
Federal law does not require paid vacation or a payout of unused vacation. Whether you are paid for unused PTO when you quit or are let go depends on your state’s law and your employer’s written policy or contract: some states treat earned vacation as wages that must be paid at separation, others let the policy decide. Check your handbook and your state labor department.
How a payout is taxed
A PTO payout is taxable wages. Employers usually withhold federal income tax on it as supplemental wages, using one of the methods in IRS Publication 15, plus Social Security, Medicare and any state tax. The calculator does not assume a tax rate: enter the percentage you see withheld if you want an estimate.
Track your balance with the PTO accrual calculator or the free PTO tracker template.
Frequently asked questions
How do I calculate my PTO payout?
Multiply your unused PTO hours by your hourly rate. For days, multiply by the hours in your workday first; for a salary, divide the salary by your hours per week × 52 to get the hourly rate.
Is PTO payout required when I leave?
It depends on your state and your employer’s policy. Federal law does not require it.
Is a PTO payout taxed?
Yes. It is wages, usually withheld as supplemental wages (see IRS Publication 15), plus payroll taxes.
Is unused sick leave paid out too?
Usually only if your employer’s policy or a state or local law says so. Many policies pay out vacation but not sick leave.