PTO Accrual Calculator
Work out per-pay-period PTO accrual — and the accrued-liability dollars that banked PTO quietly puts on your books.
Written by Dorothy Ibrahim, 10+ years in banking & finance
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How we calculate this
This calculator converts an annual PTO grant into the per-pay-period (or per-hour-worked) accrual rate, answers "when will the balance reach X hours," and prices the number most owners forget: the accrued-liability dollars that banked, unused PTO quietly puts on the books. Five people carrying modest balances can add up to a real payable, especially in states that require payout at termination.
The formulas
- Accrual per pay period
- annual PTO hours ÷ pay periods per year
- Accrual per hour worked
- annual PTO hours ÷ working hours per yearWorking hours default to 2,080 (40 × 52); the per-hour basis suits hourly and part-time staff.
- Accrued liability
- current balance hours × hourly cost of employee (× headcount for the team view)Use the loaded cost per worked hour from the True Cost of Employee calculator, not the bare wage.
- Pay periods to reach a target balance
- (target balance − current balance) ÷ accrual per period, rounded upZero if the target is already met.
Worked example
- Say the policy grants 80 PTO hours a year, paid biweekly (26 periods), each employee currently banks 24 hours, the loaded hourly cost is $35, and there are 5 employees.
- Accrual per period = 80 ÷ 26 = 3.0769 hours per paycheck; on a per-hour-worked basis it is 80 ÷ 2,080 = 0.0385 hours of PTO per hour worked.
- Accrued liability = 24 hours × $35 = $840 per employee — $4,200 across the 5-person team.
- To reach a 40-hour balance from 24 hours: (40 − 24) ÷ 3.0769 = 5.2, so 6 pay periods.
Rates, benchmarks & sources
- Accrual and liability math uses only the grant, pay schedule, balance, and hourly cost you enter — no statutory PTO constants exist federally — Arithmetic on your own policy inputs
- Capping accrual at 1.5× the annual grant to cap the balance-sheet liability — Industry rule of thumb
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- State law is not modeled: some states treat accrued PTO as earned wages that must be paid out at termination, and California prohibits use-it-or-lose-it policies outright — check your state before setting caps or forfeiture rules.
- Assumes a level accrual all year; tenure-based tiers, waiting periods for new hires, front-loaded grants, and mid-year policy changes are not modeled.
- The liability figure values every banked hour at one hourly cost — raises between accrual and use (many states value payout at the final rate of pay) will make the real liability higher.
- The 1.5×-grant accrual cap is a rule of thumb for containing liability, not a legal standard, and where caps are lawful they must still allow reasonable use of accrued time.
- Sick-leave mandates that several states and cities impose separately from PTO are outside this tool.
Frequently asked questions
How much PTO does an employee earn each paycheck?
Divide the annual grant by the number of pay periods: 80 hours a year on a biweekly schedule is 80 ÷ 26 = 3.08 hours per paycheck. For hourly or part-time staff, the per-hour-worked basis is often fairer — 80 ÷ 2,080 = 0.0385 hours of PTO per hour worked — because accrual then scales automatically with actual hours instead of assuming full time.
Why is banked PTO a liability on my books?
Because those hours are compensation already earned that you have not yet paid — the employee will either take the time (you pay wages for no output that week) or, in many states, be paid out at termination. At the default inputs, 24 banked hours × $35 loaded cost × 5 employees is a $4,200 payable. It grows silently every pay period, which is why accountants accrue it and why owners are often surprised by it.
Can I use a use-it-or-lose-it policy to keep balances down?
It depends entirely on your state. California treats accrued PTO as earned wages that cannot be forfeited, so use-it-or-lose-it is illegal there, while other states allow it with notice, and several require accrued time to be paid out at termination regardless. A reasonable accrual cap — the 1.5×-annual-grant figure is a common rule of thumb — is lawful in more places than outright forfeiture, but confirm your state’s rules first.
What hourly cost should I use for the liability figure?
The loaded cost per worked hour, not the bare wage — when someone takes PTO you still pay their payroll taxes and benefits for that time, and their work is covered by someone else or not done. The True Cost of Employee calculator produces exactly this number (its default lands around $40/hour for a $55,000 salary); using the bare wage understates what banked hours really cost you.
How do I know when an employee will have enough PTO for a planned vacation?
The target-balance solver does the math: it subtracts the current balance from the target, divides by the per-period accrual, and rounds up. From 24 banked hours accruing 3.08 hours biweekly, reaching 40 hours takes 6 pay periods — about 12 weeks. This is also useful in reverse, for checking whether an approved future request will actually be covered by then.
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themoneysheet provides educational estimates, not financial, tax, or legal advice. Figures use published rates and formulas current as of the date shown, but your situation may differ. Consult a qualified professional (CPA, attorney, or licensed advisor) before making financial decisions.