PTO Payout Calculator 2026
Calculate the payout for your unused PTO or vacation time, see how much federal, Social Security, Medicare and state tax may be withheld from it, and check whether your state requires employers to pay out earned vacation when you leave.
Withholding estimate for a lump-sum payout paid separately from regular wages, using IRS Publication 15 (2026) and sourced state supplemental rates. Whether you are owed a payout depends on your state and your employer's policy. It is not legal or tax advice.
Your unused PTO
Regular pay received this calendar year, plus any wages from a new job.
Used only for the $1,000,000 federal threshold where withholding rises to 37%.
Gross PTO payout
$2,400.00
80 hours × $30.00 an hour
California: Payout of earned vacation required
California requires payout of all earned, vested vacation at the final rate when employment ends. Employers cannot make you forfeit vested vacation, and use-it-or-lose-it policies are not allowed, though reasonable accrual caps are.
Source: Cal. Lab. Code § 227.3 · All states
Estimated PTO payout after withholding
$1,530.00
$870 withheld from $2,400 gross
- Federal income tax (22% flat method)
- $528.00
- Social Security (6.2%)
- $148.80
- Medicare (1.45%)
- $34.80
- California supplemental withholding (6.6%)
- $158.40
- Total withheld
- $870.00
Estimated added annual tax from this payment
- Federal income tax (top bracket 12%)
- $288.00
- Social Security and Medicare
- $183.60
- California income tax
- $144.00
- Payment after estimated annual tax
- $1,784.40
Modeled withholding is about $254 above the estimated added annual tax. This difference can affect your overall tax balance; it is not a refund or amount-due forecast.
How to calculate a PTO payout
A payout is your unused balance multiplied by your rate of pay:
PTO payout = unused hours × hourly rate
For salaried employees the calculator converts salary to an hourly rate over 2,080 hours a year, the standard full-time schedule of 40 hours × 52 weeks. Balances tracked in days are converted with your hours per workday. Your employer's policy decides the details that change the result: which rate applies, whether accrued but unvested time counts, and whether sick leave is included. Most states that require a payout cover vacation; separate sick leave is often treated differently.
Is PTO payout taxed?
Yes. A vacation or PTO payout is wages, so federal income tax, Social Security (6.2% up to the $184,500 wage base) and Medicare (1.45%) all apply, along with state and local income tax where they exist. IRS Publication 15 treats vacation pay as regular wages when you take the time off, but a payout in addition to regular wages, such as a lump sum for unused vacation, is supplemental wages. Paid separately, it can be withheld at a flat 22% federal rate, or 37% above $1,000,000 of supplemental wages for the year.
The payout is not taxed at a special rate on your return. It is added to your other wages for the year, so the tax it adds depends on your bracket. The second card in the calculator compares flat withholding with that estimate. Some states withhold differently on bonuses than on other supplemental pay, so a payout can have lower state withholding than a bonus of the same size.
Do employers have to pay out unused vacation?
Not under federal law. The U.S. Department of Labor explains that the Fair Labor Standards Act does not require payment for time not worked, such as vacations; these benefits are a matter of agreement between employer and employee. State law fills the gap. A few states require employers to pay earned vacation at separation, many enforce whatever the written policy promises, and some have no rule at all. Our PTO payout laws by state table summarizes each state with a link to the official source.
Worked example: 10 unused days on a $83,200 salary
- The hourly rate is $83,200 ÷ 2,080 = $40.00. Ten 8-hour days is 80 hours, so the payout is $3,200.
- Paid separately in Florida, which has no state income tax, the check has $704 federal withholding, $198 Social Security and $46 Medicare taken out, leaving $2,251.
- With $65,000 of other wages as a single filer, the payout adds about $554 of federal income tax, with the top of it in the 22% bracket.
Sources and limitations
Federal withholding follows IRS Publication 15 (2026); state supplemental rates link to official sources on the bonus tax calculator, and state payout rules link to statutes or labor departments on the PTO payout laws page. The annual comparison uses our methodology and treats your other wages as already paid. It does not model the aggregate method, pre-tax deductions, credits or other income.
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Frequently asked questions
How do you calculate a PTO payout?
Multiply your unused PTO hours by your hourly rate. If you are salaried, a common conversion is annual salary ÷ 2,080 hours (40 hours × 52 weeks). If your balance is in days, multiply days by your hours per day first. Your employer's policy can use a different rate, for example your current rate or the rate when the time was earned.
Is a PTO payout taxed?
Yes. A PTO or vacation payout is wages, subject to federal income tax, Social Security, Medicare and any state or local income tax. A lump-sum payout made in addition to regular wages is treated as supplemental wages, so employers may withhold federal income tax at a flat 22%.
Why is my PTO payout taxed so much?
It usually is not taxed at a higher rate; it is withheld differently. With the flat method, 22% federal plus 7.65% FICA is about 29.65% before state tax. If the payout is added to a regular paycheck and run through the normal tables, that check can look like a much higher annual salary and be withheld more. The final tax is settled on your return.
Do employers have to pay out unused PTO?
Federal law does not require it; the Fair Labor Standards Act does not require payment for time not worked, such as vacation. Some states require payout of earned vacation at separation, and many others enforce whatever your employer's written policy promises. See our state-by-state PTO payout laws table.
Is a PTO payout taxed differently from a bonus?
Federally, both are supplemental wages with the same 22% optional flat rate. Some states use a different withholding rate for bonuses than for other supplemental pay; California, for example, withholds 10.23% on bonuses but 6.6% on other supplemental wages.