US · State Employment Standards
US PTO Payout Laws 2026
There is no federal law requiring employers to pay out accrued PTO when employment ends. Whether you get paid for unused vacation depends entirely on your state law and, in some states, your employer's written policy.
Calculators
PTO payout calculator →
Leaving your job with unused vacation? Find out what your employer must pay — rules vary by state and are built in for all 50.
Final paycheck deadline calculator →
Left a job and waiting for your last paycheck? Find the legal deadline your employer must meet — by state and how you left.
States that require PTO payout
In these states, accrued vacation is treated as earned wages and must be paid out on termination regardless of company policy:
States with no payout requirement
In these states, employers can adopt "use it or lose it" policies or cap PTO accruals — though if the employer's own written policy promises payout, that policy becomes contractually binding and must be honoured:
How to calculate your PTO payout
PTO payout is generally calculated at your final regular rate of pay:
- Hourly: hours of accrued PTO × hourly rate
- Salaried: (annual salary ÷ 52 ÷ 5) × days of accrued PTO, or (annual salary ÷ working days per year) × days accrued
PTO payout is taxable as ordinary income — the IRS treats it as supplemental wages, which are withheld at either the 22% flat rate or your marginal rate depending on how it is paid (separately vs combined with regular wages).
What to do if your employer refuses to pay
If you are in a state that requires PTO payout and your employer refuses:
- Write to your employer citing the specific state statute
- File a wage claim with your state Department of Labor
- Consider a private claim for wages — many states allow recovery of 2× or 3× the unpaid amount as a penalty