PTO Payout Calculator
Estimate your unused PTO payout from hours and pay rate: gross value, federal, Social Security, and Medicare withholding, and the net cash-out you take home.
PTO Payout Calculator
Your pay rate
Your gross hourly wage before any deductions.
Your gross yearly salary before deductions.
Used to derive your effective hourly rate. 40 hours a week is the standard 2,080 hours a year.
Payout and withholding
Fractional hours are fine (for example 37.5).
None zeroes the federal income tax line only. Social Security and Medicare still apply, because PTO payouts are always FICA wages.
Enter your state effective withholding rate. Leave at 0 if your state has no income tax.
Withholding is an estimate, not a final tax. The flat 22% federal rate applies when a payout is paid separately from a regular check. Your true tax is settled on your annual return. Figures use tax year 2026 constants.
How to calculate a PTO payout
A PTO payout is one multiplication: your unused paid-time-off hours times your pay rate. If you have 40 hours banked and earn $25.00 an hour, the gross payout is 40 x $25.00 = $1,000.00. That gross figure is the starting point, before any tax comes out.
Salaried workers need one extra step, because a salary is not stated as an hourly rate. Convert it first: divide your annual salary by the hours you work in a year. A standard 40 hour week is 2,080 hours a year (40 x 52), so a $52,000 salary is an effective rate of $52,000 divided by 2,080, which is $25.00 an hour. Multiply that by your unused hours the same way. Switch the pay type chip above to Salary and the calculator runs the conversion for you. If your salary-to-hourly math comes up in other contexts too, the Pay Frequency Converter covers the wider set of conversions.
Fractional hours are allowed, so a balance of 37.5 hours works as cleanly as a round 40. The gross is rounded to the nearest cent, and every tax line below is figured from that rounded gross so the numbers on screen add up exactly.
How PTO payouts are taxed
The IRS treats a PTO payout as supplemental wages, the same category as a bonus or a commission. When a payout is paid separately from your regular check, employers commonly withhold a flat 22% for federal income tax (the tax year 2026 supplemental rate for wages up to $1 million; a 37% tier applies above that). On top of that sits FICA: 6.2% for Social Security and 1.45% for Medicare, a combined 7.65%. Add any state income tax and the total bite often leaves roughly 60 to 70 percent of the gross as net.
A couple of things are worth spelling out. First, the 22% is a withholding estimate, not your final tax rate. Your real bill is settled on your annual return based on your total income and bracket, so if 22% overshot your true rate the difference comes back as a refund. If you would rather work backward from a target take-home amount, the Gross-Up Calculator solves the gross needed to land on a chosen net. Second, choosing None for federal withholding here zeroes only the federal income tax line. Social Security and Medicare still apply, because a PTO payout is always FICA wages.
One edge case for high earners: Social Security only applies up to the annual wage base ($184,500 in 2026). If your year-to-date wages have already passed that cap, no further Social Security is owed on the payout, so this tool would slightly overstate the FICA line. The YTD Earnings Calculator helps you check where your wages sit against the cap. Medicare has no wage cap, and an Additional Medicare surtax of 0.9% can apply above high-income thresholds, which this simple estimate does not model.
When employers must pay out unused PTO
Whether unused PTO gets paid out at all depends on your state and your employer policy, and the rules split into two broad camps. Some states treat accrued, unused vacation as earned wages that must be paid when you leave a job, and they limit or forbid use-it-or-lose-it forfeiture. Other states leave payout to the employer written policy, which may cap how much you can accrue or state plainly that unused time is not paid on separation.
Timing varies too. Where payout is required, some states fold it into the final paycheck on a set deadline after your last day. Since a PTO payout is often part of a final check rather than a standalone payment, it is worth reading your handbook alongside your state labor department guidance. This is a general overview, not legal advice; the rule that governs your situation is the one written for your state and your employer.
Add a PTO payout to a paystub with Payslip44
Once you know the numbers, a payout still has to appear on a document. On a real stub, a PTO cash-out is a supplemental earning line, and the taxes above become matching deduction lines: federal income tax, Social Security, Medicare, and state. If you are building the earnings side from an hourly figure, the Hourly to Paystub Earnings Calculator assembles those lines from a rate.
Payslip44 puts it all on the page: reusable employer, employee, and line-item templates, W-2 / 1099 / statutory / owner classifications, per-line amounts, six layouts, and decimal-precise money math that does not drift by a cent. Everything runs on-device, and finished stubs export to PDF, PNG, CSV, or plain text. Download Payslip44 to add your PTO payout to an actual paystub.
Frequently Asked Questions
Common questions about pto payout calculator
How do I calculate my PTO payout?
Multiply your unused PTO hours by your hourly pay rate. If you are salaried, convert your salary to an hourly rate first by dividing annual salary by the hours you work per year (annual salary divided by hours per week times 52). A 40 hour week works out to 2,080 hours a year, so a $52,000 salary is an effective rate of $25.00 an hour. Multiply that rate by your unused hours for the gross payout.
How is a PTO payout taxed?
The IRS treats a PTO payout as supplemental wages. That means it is subject to federal income tax withholding, Social Security (6.2%), and Medicare (1.45%), plus any state income tax. When the payout is paid separately from a regular check, employers commonly apply the flat 22% federal supplemental rate rather than running it through your normal W-4 withholding.
What is the federal tax rate on a PTO payout?
When paid separately, employers commonly withhold a flat 22% for federal income tax on supplemental wages up to $1 million (a 37% tier applies above that). This is a withholding estimate, not your final tax rate. What you actually owe is settled on your annual return based on your total income and bracket.
Why is my PTO payout taxed so much?
Stack the 22% federal supplemental rate on top of 7.65% FICA (Social Security plus Medicare) and any state tax, and withholding often leaves roughly 60 to 70 percent of the gross as net. It looks steep because the flat 22% is usually higher than the effective rate on your regular paychecks. If your real bracket is lower, some of that withholding comes back as a refund at tax time.
How do I calculate PTO payout for a salaried employee?
Divide your annual salary by the number of hours you work in a year to get the effective hourly rate. A standard 40 hour week is 2,080 hours a year, so divide salary by 2,080 (or by your actual weekly hours times 52). Then multiply that effective rate by your unused PTO hours. Switch the pay type chip above to Salary and the calculator does this conversion for you.
Do employers have to pay out unused PTO?
It depends on the state and the employer policy. Some states require payout of accrued, unused vacation when you leave a job, and treat earned PTO as wages that cannot be forfeited. Many other states leave it to the employer written policy, which may cap accrual or set a use-it-or-lose-it rule. Check your handbook and your state labor department for the specifics.
Is PTO payout subject to Social Security and Medicare?
Yes. A PTO payout is wages, so FICA always applies: 6.2% for Social Security up to the annual wage base ($184,500 in 2026) and 1.45% for Medicare with no cap. FICA is withheld even when you choose the gross-only option here, because selecting no federal income tax withholding does not remove Social Security and Medicare.
Is the 22% withholding my final tax on the payout?
No. It is a withholding estimate, not a final tax. Your actual tax is settled when you file your annual return based on your total income for the year and your bracket. If 22% was more than your true rate, the difference comes back as a refund. If you were in a higher bracket, you may owe a bit more.