PTO Payout Calculator
Enter an employee's unused PTO and pay rate to see the payout before and after taxes. Pick any US state, or DC, to see whether payout is required there and when the final paycheck is due.
PTO Payout Calculator: By State, Before and After Taxes
Social Security stops once yearly pay passes $184,500.
Pick a state to see its rule
Final paycheck deadline⚠️ This is an estimate, not legal or tax advice. Check your state's labor department or speak with an employment lawyer before paying.
What is a PTO payout?
A PTO payout is the cash an employer pays for paid time off an employee earned but didn’t use. It usually happens when the employee leaves, whether they quit, are fired or are laid off.
Whether you have to pay it depends on the state. A handful of states, including California, Colorado, Illinois and Massachusetts, require it by law. In most states, your written policy decides. See the full breakdown in our guide to PTO payout laws by state.
How to calculate a PTO payout
PTO payout = unused PTO hours × hourly rate
Use the employee’s current rate of pay. California requires the final rate, and most employers use it everywhere.
Hourly employees
$25 an hour, 40 unused PTO hours.
40 × $25 = $1,000
Salaried employees
Turn the salary into an hourly rate first. For a full-time employee, divide the annual salary by 2,080 (40 hours × 52 weeks).
$78,000 a year, 60 unused PTO hours.
$78,000 ÷ 2,080 = $37.50 an hour
60 × $37.50 = $2,250
PTO tracked in days
Multiply days by the hours in a workday: 7.5 days × 8 hours = 60 hours.
Part-time employees
Use their real weekly hours: $52,000 a year on 20 hours a week = $52,000 ÷ (20 × 52) = $50 an hour.
Here’s the deal: the math is easy. The hard part is the balance. If accruals, carryover or caps were tracked wrong, the payout is wrong too.
How much is a PTO payout taxed?
A PTO payout is taxed as wages. Paid as a lump sum at separation, it’s usually treated as supplemental wages, so employers can withhold federal income tax at a flat 22% (37% above $1 million in supplemental wages a year), per IRS Publication 15 (2026). Social Security (6.2%, up to $184,500 in 2026), Medicare (1.45%) and state tax apply too.
Example: a $2,250 payout
- Federal withholding (22%): $495.00
- Social Security (6.2%): $139.50
- Medicare (1.45%): $32.63
- Estimated net before state tax: $1,582.87
Withholding isn’t the final bill. The employee’s actual tax is settled on their return.
Does my state require a PTO payout?
In short:
- Required by law: California, Colorado, Illinois, Louisiana, Maine (employers with 11+ employees), Massachusetts, Montana, Nebraska, North Dakota and Rhode Island (after 1 year of service).
- Required unless the employee signed a forfeiture policy: Wyoming.
- Your written policy decides: every other state and DC.
Pick your state in the calculator for its rule and final paycheck deadline. For the details, exceptions and official sources, read PTO payout laws by state.
Know every employee's exact PTO balance on their last day.
Vacation Tracker tracks accruals, caps and carryover per location in Microsoft Teams, Slack or Google Workspace.
FAQ
Multiply the unused PTO hours by the employee's hourly rate. For salaried employees, divide the annual salary by 2,080 first to get the hourly rate.
Divide the annual salary by the hours they work in a year (2,080 for full time), then multiply by the unused PTO hours. A $78,000 salary is $37.50 an hour, so 60 hours pays $2,250.
Employers often withhold federal income tax at a flat 22% on payouts, plus 6.2% Social Security and 1.45% Medicare. State tax depends on the state. The final tax is settled when the employee files their return.
It isn't taxed at a higher rate. The flat 22% federal withholding can be more than the rate withheld from a regular paycheck, so it can look higher. Any difference is settled at tax time.
It depends on your state and your employer's policy. Ten states require payout by law, and Wyoming does too unless the employee signed a forfeiture policy. Everywhere else, it's paid if the employer's policy or contract promises it. See PTO payout laws by state.
Usually your current, final rate. California requires the final rate.
Disclaimer
This calculator is for general information only and isn't legal or tax advice. State laws change, and your policy, contracts and collective agreements can change the answer. Check your state's labor department or an employment lawyer before making payout decisions. State rules last checked: October 20, 2026.
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