Vacation Payout Calculator: What You're Owed When You Quit, State by State

The Final-Paycheck Number Most People Get Wrong

When you give notice, your accrued PTO balance suddenly stops being a planning tool and becomes a number on a check. For some workers, it's the largest single payment they'll receive that month. For others, it disappears entirely -- earned, accumulated, and then erased by a single line in the employee handbook.

Whether your unused vacation gets paid out depends on three things: the state where you work, your employer's written policy, and (for lump-sum policies) how the IRS taxes the resulting payment. Get any of the three wrong and you'll either leave money on the table or be unpleasantly surprised when the deposit hits.

This guide is a calculator, not a rulebook. Plug in your hours, your pay rate, and your state, and you'll know what to expect. For the deeper legal context on which states force employers to pay out, our PTO payout when you quit: state rules breakdown covers the statutes and case law in detail.

This article is general information, not legal advice. Laws change and vary by jurisdiction — verify with the relevant government agency or an employment attorney.

What Are the Inputs You Need?

Before you can calculate, gather four numbers. Each one comes from a specific source.

For salaried workers, the hourly rate calculation matters. The standard convention is to divide your annual base salary by 2,080 hours (52 weeks × 40 hours). A worker earning $90,000 has an effective hourly rate of $43.27 for payout purposes. Some employers use 2,000 or 2,088 hours instead, which produces a slightly different number -- check your policy.

If your most recent role came with a raise, payout is based on your current rate, not your average over the year. This is especially important for workers who got promoted late in their tenure: the same accrued hours can be worth meaningfully more after a comp increase.

How Do You Calculate the Gross Payout?

The base formula is straightforward:

Gross payout = Accrued hours × Hourly rate

Worked examples at a few common scenarios:

These are gross figures before any tax withholding. Net deposit is significantly lower -- see the tax section below.

A few wrinkles can change the gross number:

• Bonuses and commissions generally aren't included in the hourly-rate calculation for payout purposes unless your contract says they are.
• Differentials (shift premiums, on-call pay, hazard pay) usually aren't included either, though some states require regular-rate calculations that capture them.
• Overtime hours worked are not the same as paid PTO hours. Your accrual is on scheduled hours, not on time-and-a-half.

Which States Require Payout?

There is no federal law requiring employers to pay out unused vacation when you leave. The federal Fair Labor Standards Act regulates earned wages, but vacation isn't a wage under federal law. State law is what creates the obligation -- or doesn't.

Roughly speaking, states fall into three buckets: states that require payout regardless of policy, states that allow the employer to set the rule via written policy (so payout depends on the handbook), and a small group with specific carve-outs.

A few important clarifications. First, "depends on policy" means the employer gets to set the rule, but the rule must be in writing and must have been communicated to you at or before hire. Verbal policies generally don't survive a wage-claim hearing.

Second, even in mandate states, the type of leave matters. California treats vacation as wages, but it treats statutory paid sick leave differently -- accrued PSL is generally not paid out on separation, only accrued vacation is. If your employer bundles them in a single PTO bank, the entire bank often gets treated as vacation for payout purposes.

Third, some "required" states have notice provisos. North Dakota lets employers withhold payout if you quit within your first year and didn't give five days' notice. Read the specifics of your state.

How Is PTO Payout Taxed?

The federal IRS treats lump-sum vacation payout as supplemental wages. This triggers a flat withholding rate of 22% for federal income tax on amounts under $1 million in a calendar year, regardless of your normal withholding. (For amounts over $1M, the rate jumps to 37%.) Social Security and Medicare withholding apply normally -- 6.2% and 1.45% -- on the entire amount, subject to the annual Social Security wage base.

State income tax depends on where you work. States with no income tax (Florida, Texas, Tennessee, Washington, Nevada, South Dakota, Wyoming, Alaska, New Hampshire) won't withhold. States with their own supplemental rates (e.g., California at 6.6% for most supplemental wages like vacation pay, or 10.23% for bonuses and stock options) will apply those.

Worked example: 80 hours unused PTO, $75,000 salary, working in California.

• Gross payout: 80 × $36.06 = $2,885
• Federal income tax (supplemental rate): 22% × $2,885 = $635
• Social Security: 6.2% × $2,885 = $179
• Medicare: 1.45% × $2,885 = $42
• California supplemental: 6.6% × $2,885 = $190
• Net deposit: ~$1,839

About 36% of the gross disappears to withholding before the money hits your account. Depending on your overall tax situation for the year, some of the federal portion may come back as a refund -- the 22% supplemental rate is a withholding rate, not your final tax rate.

There's a planning angle here. If you can time your separation so that the payout falls into a year where your overall income (and therefore marginal rate) is lower, your final tax bill may be lower even though withholding is the same. This is most relevant for workers leaving a job late in the year and starting a new one in January, or for those moving from a high-earning W-2 role to self-employment.

This is general information, not legal or tax advice. Consult a CPA for any payout meaningful enough to matter to your annual taxes.

Can Your Employer Cap What They'll Pay Out?

In most states, yes. Caps come in two flavors.

Accrual caps stop the meter from running once you hit a balance. If your cap is 1.5x your annual allotment (a common figure), and your annual is 15 days, you stop accruing once you hit 22.5 days. New accrual resumes only after you use enough hours to drop back below the cap. California allows accrual caps but bans forfeiture of already-accrued hours; the cap stops growth, it doesn't shrink your existing balance.

Payout caps limit what the employer will write a check for at separation, even if your accrued balance is higher. These are most common at companies with anniversary-lump policies, where the math otherwise allows large balances to accumulate. A "we'll pay out a maximum of 80 hours regardless of accrued balance" clause in your handbook means anything above 80 hours is forfeited at separation.

Whether payout caps are enforceable depends on the same state-by-state rules as the underlying payout obligation. In California, a payout cap on accrued vacation is generally not enforceable because vacation is wages -- but the accrual cap that prevents the balance from growing in the first place is. In policy-controlled states, both are usually enforceable if the handbook is clear.

For more on the cap mechanics and whether your state allows year-end forfeiture, see use-it-or-lose-it PTO state laws.

What If You're Fired vs Quit?

Most state vacation-payout laws apply equally regardless of how the employment ends. California, Montana, Nebraska, Illinois, and the other mandate states require payout whether you quit, were laid off, or were fired for cause. The reason: earned vacation has been treated as compensation already earned, not as a discretionary benefit conditional on continued employment.

A few states have narrower rules. North Dakota's notice-based withholding only applies to voluntary resignations within the first year. Some employer policies in policy-controlled states say payout is forfeited if you're terminated for cause -- these provisions are generally enforceable in states without a wage mandate, but they can run into trouble in mandate states.

The timing of the final check also varies by state. California requires final wages (including vacation payout) to be delivered immediately if you're fired, and within 72 hours if you quit without notice. Other states allow up to 30 days. Knowing your state's deadline matters if you're depending on the payout for moving expenses, COBRA premiums, or a gap before your next paycheck.

How Do You Verify Your Payout Amount?

When the final check arrives, do the math. The most common errors:

1. Wrong hourly rate. Check that they used your separation rate, not an older one.
2. Stale balance. Confirm the hours match your last pay stub plus any accrual through your final day.
3. Wrong tax treatment. If your employer combined your payout with regular wages on one check, federal supplemental withholding may have been calculated using the aggregate method instead of the flat 22% -- this can produce noticeably different net amounts.
4. Missing accrual for partial period. If you leave mid-pay-period, you usually accrue PTO for the days you worked. Some payroll systems skip this.
5. Forfeited balance above a cap. If you were over an accrual cap that you didn't know existed, you may be missing hours.

If something looks off, raise it in writing within the deadline your state sets for wage-claim filings. Most states give you between 1 and 3 years.

PTO payout is one of the few moments when leave has a single, dollar-denominated value. Knowing the number -- what you should get, what tax will be withheld, what your state lets your employer do -- turns "I'll figure it out when the check comes" into a question you can actually answer before you submit your notice. For the broader picture of what each unused day is worth to you in real economic terms, see the true cost of a vacation day by city and salary.

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