PTO Payout Calculator
Use this PTO payout calculator to find out how much an employee should be paid for unused PTO when they leave a job. Enter the unused hours and hourly rate to calculate the exact payout amount.
Total PTO payout
$1,846.00
for 40 unused hours
Hourly rate used: $46.15
Unused PTO in days: 5 days
This employee is owed $1,846.00 for 40 unused PTO hours at $46.15 per hour.
PTO Payout Laws by State
PTO payout laws vary by state. Some states require employers to pay out all unused PTO when an employee leaves. Others leave it to the employer's policy. Here are the key rules for major states.
| State | Payout Required | Note |
|---|---|---|
| California | Required | All unused PTO must be paid out at termination. |
| New York | Depends on policy | Payout is required if the employer's policy or contract says so. |
| Texas | Depends on policy | No state law requiring payout; depends on written policy. |
| Florida | Depends on policy | No state mandate; governed by employer policy or contract. |
| Illinois | Required | Unused PTO must be paid out when employment ends. |
| Colorado | Required | Wage Claim Act requires payout of earned but unused vacation. |
| Massachusetts | Required | Unused vacation is treated as wages and must be paid out. |
| Washington | Depends on policy | Payout required if policy or agreement provides for it. |
| Georgia | Depends on policy | No state law; employer policy controls payout. |
| North Carolina | Depends on policy | Payout required only if promised in policy or contract. |
This table is for general guidance only. Employment law changes frequently — always verify current rules with a legal professional or your state's Department of Labor.
Frequently Asked Questions
Is PTO payout required by law?
It depends on your state. Some states like California, Illinois, and Massachusetts treat unused PTO as earned wages and require full payout at termination. Other states defer to the employer's written policy. Always check your state's specific labor laws.
How is PTO payout taxed?
PTO payout is taxed as regular wages — subject to federal income tax, Social Security, Medicare, and any applicable state and local taxes. It will appear on the employee's final W-2 as part of their total wages for the year.
Can an employer refuse to pay out PTO?
In states that require PTO payout, refusal is illegal and can result in penalties. In states where it depends on policy, an employer can refuse only if their written policy explicitly states that unused PTO is forfeited. If the policy is silent, courts often rule in favor of the employee.
What happens to PTO when a company is acquired?
During an acquisition, PTO liabilities usually transfer to the acquiring company. The new employer may honor existing balances, convert them to a new system, or in some cases, pay them out. This should be outlined in the transition agreement communicated to employees.
Is PTO payout different from severance?
Yes. PTO payout is payment for earned but unused vacation time that the employee has already accrued. Severance is a separate payment often offered as part of a termination package and is typically governed by a severance agreement, not by PTO accrual laws.
Can I negotiate PTO payout?
In states where PTO payout is required by law, you generally cannot negotiate away your right to it. However, in states where it depends on policy, you may be able to negotiate a higher payout or a longer notice period that allows you to use remaining PTO before leaving.