PTO Accrual Calculator

How it works

An accrual policy spreads the year's paid time off over the hours worked. The accrual rate is the annual PTO hours divided by the hours the PTO is earned over, so 10 days of 8 hours over a 2,080-hour year is 80 ÷ 2,080 = 0.0385 hours of PTO for every hour worked. Per pay period and per month, the annual hours are divided by the number of periods.

The projection adds the PTO earned at the weekly hours you enter over the weeks ahead to the current balance and subtracts the hours you expect to be used. If the policy caps the balance, accrual stops once the balance reaches the cap; the calculator applies the cap before the hours used are subtracted.

Unused PTO is a liability to the extent it will be paid, either as time off or as a payout at separation. Its cost is the balance in hours times the hourly rate, plus the payroll taxes and other wage-based costs paid on that pay.

Formula

annual PTO hours   = PTO days × hours per day
accrual per hour   = annual PTO hours ÷ work hours per year
per pay period     = annual PTO hours ÷ pay periods per year
per month          = annual PTO hours ÷ 12
per week           = accrual per hour × hours worked per week
accrued            = min(per week × weeks, cap − balance)   (no cap: per week × weeks)
projected balance  = current balance + accrued − hours used
liability          = balance hours × hourly rate × (1 + burden %)

Example

Fifteen PTO days of 8 hours over a 2,080-hour year is 120 ÷ 2,080 = 0.0577 hours per hour worked.

Ten days over 2,080 hours is 80 ÷ 2,080 = 0.0385 hours per hour worked: 3.08 hours every two weeks, 6.67 hours a month, or 1.54 hours in a 40-hour week. Starting from 24 hours, 26 weeks add 40 hours; after 16 hours are used the balance is 48 hours. At $25 an hour plus the 7.65% default burden the current 24 hours represent $645.90 and the projected 48 hours $1,291.80.

Assumptions and limitations

• Results are for informational and educational purposes and are not legal, tax, accounting or employment advice. Whether unused PTO must be paid out at separation, and whether caps or use-it-or-lose-it rules are allowed, depends on state law and the employer's policy.
• PTO is earned evenly on every hour worked at a constant weekly schedule. Policies that accrue per pay period regardless of hours, front-load the year, or raise the rate with tenure are not modelled week by week.
• With a cap, accrual is assumed to stop once the cap is reached and the planned use is subtracted at the end of the period; PTO used earlier would let accrual resume, so the projection is the lower end when the cap binds.
• The liability prices hours at today's rate and burden. Pay raises before the time is used or paid out increase it. The burden default is employer Social Security and Medicare only.

Frequently asked questions