SOURCE:    Vacation Tracker
TITLE:     PTO Payout Calculator (2026): By State, Before and After Taxes
URL:       https://vacationtracker.io/tools/pto-payout-calculator/
LANG:      en
PUBLISHED: 2026-10-20
UPDATED:   2026-10-20
SUMMARY:   Free PTO payout calculator for hourly and salaried employees. Get the vacation payout before and after taxes, plus your state's payout rule and final paycheck deadline.

# PTO Payout Calculator (2026): By State, Before and After Taxes

## 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 (/blog/pto-payouts-employee-exit/).

## 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 (/blog/pto-payouts-employee-exit/).