2026 PTO payout calculator
Turn your unused vacation hours into a dollar figure, then see what is left after taxes.
Updated for 2026Checked Oct 30, 2026 against IRS Publication 15How we check
Estimated take-home
$1,688.40
after federal income tax, Social Security, and Medicare
- Gross payout
- $2,400.00
- Federal income tax withheld
- $528.00
- Social Security
- $148.80
- Medicare
- $34.80
- State income tax
- $0.00
- Estimated take-home
- $1,688.40
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Estimated take-home $1,688.40
Whether you get paid for unused time
Federal law leaves this to you and your employer. The Department of Labor says the Fair Labor Standards Act does not require pay for time not worked, including vacation, and treats these benefits as a matter of agreement. That sends you to two places: your employer's written policy, and your state's labor department.
State law can overrule a policy. California is the clearest example: earned and unused vacation must be paid at your final rate when your job ends, under Labor Code Section 227.3, and a "use it or lose it" policy is illegal there. Other states draw the line elsewhere, so check yours before you count on the money, and ask whether sick days are treated the same way as vacation.
How the payout is taxed
A lump-sum payment for unused vacation counts as a supplemental wage under IRS rules, so it can be withheld at the flat 22 percent federal rate, the same treatment a bonus gets. Social Security and Medicare come out too. In the starting example above, 80 hours at $30 is $2,400 before taxes and $1,688.40 after those three federal lines. Your state may take more, which you can add under More options.
If the payout lands on the same check as your regular wages with no separate amount listed, your employer withholds on the combined total as one paycheck. That can make the check look smaller than this estimate, even though your final tax for the year is the same either way.
Getting the rate and hours right
California requires your final rate of pay. Elsewhere, check your policy, because a raise this year would count in your favor. Salaried workers can divide annual pay by 2,080, the hours in a 52-week year of 40-hour weeks. If your balance is shown in days, multiply by the hours in your normal workday first. Check whether the balance on your pay stub is already current, since some employers add new time only once a month or once a pay period.
If the payout is part of a layoff, run your package through the severance pay calculator as well. Both payments can arrive in the same pay period.
Sources and checks
Checked on Oct 30, 2026. Source: IRS Publication 15 (2026), read Oct 30, 2026: section 5 lists severance pay among supplemental wages; severance payments are wages subject to Social Security, Medicare, federal income tax withholding, and FUTA tax; an annual lump-sum payment for unused vacation leave is treated as a supplemental wage payment.
Whether a payout is required: U.S. Department of Labor, Vacation Leave (dol.gov/general/topic/workhours/vacation_leave, read Oct 30, 2026): the Fair Labor Standards Act does not require payment for time not worked, such as vacations. California: Department of Industrial Relations, Vacation FAQ (dir.ca.gov/dlse/faq_vacation.htm, read Oct 30, 2026): all earned and unused vacation must be paid at the final rate of pay, Labor Code Section 227.3.
Flat withholding rates: IRS Publication 15 (2026), "What's New" and section 7 (fetched and read Oct 28, 2026: 'the withholding rate on supplemental wages remains 22% (37% if supplemental wages paid to an employee during the calendar year exceed $1 million)').
Every figure above comes from the sources listed here. How we check our numbers.
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