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How to Calculate PTO Accrual Rate and Track Your PTO Balance

How to Calculate PTO Accrual Rate and Track Your PTO Balance

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Manage your paid time off all in one place with Vacation Tracker.

Summary

  • PTO accrual means employees earn time off gradually, based on how much they work and your company’s chosen method.
  • Common ways to calculate PTO include annual, hourly, and bi-weekly accruals, each with its own formula and use case.
  • Factors like accrual caps, probation periods, and local laws can affect how much vacation employees earn over time.
  • Manual PTO tracking often leads to errors and wasted time, which can quietly cost businesses thousands of dollars.
  • Automating accruals makes it easier to stay accurate, reduce mistakes, and keep everyone informed about their time off.

Last updated on July 17, 2025

Frequently asked questions

A PTO accrual rate is the pace at which employees earn paid time off based on the time they’ve worked. Instead of receiving all their PTO at once, employees accumulate it gradually, typically calculated hourly, bi-weekly, or monthly depending on your policy.

To calculate PTO accrual for hourly employees, divide the total number of PTO hours they’re entitled to annually by the number of hours they’re expected to work per year. For example, if an employee earns 80 hours of PTO annually and works 2,080 hours per year, their accrual rate is 0.0385 hours of PTO per hour worked.

To calculate bi-weekly PTO accrual, divide the total number of PTO hours given per year by 26, which represents the number of bi-weekly pay periods. If an employee receives 80 hours annually, they will accrue 3.08 hours every two weeks.

Some companies choose to delay PTO accrual during probationary periods, while others allow it to start from day one. If accrual is delayed, the employee’s total PTO is usually prorated to reflect the shorter eligibility period in their first year.

The most common mistakes include using inconsistent formulas, failing to adjust for part-time hours, not accounting for different leave types, and ignoring local PTO laws for employees in other regions. These errors can lead to confusion, inaccurate balances, and compliance risks.

Yes. Automating PTO accrual tracking reduces manual errors, saves time, and ensures your balances reflect your actual policy. With a tool like Vacation Tracker, you can configure custom rules once and let the system handle everything else in real time.