PTO Payout Calculator

Yes. In California, accrued vacation time is considered earned wages. California law expressly prohibits "use-it-or-lose-it" policies. All earned, unused PTO must be paid out at your final rate of pay upon termination, regardless of the reason for leaving.

It depends on your state. 10 states treat accrued PTO as earned wages, so your employer must pay it out when you leave regardless of company policy: California, Colorado, Illinois, Louisiana, Maine, Massachusetts, Montana, Nebraska, North Dakota, and Rhode Island. Elsewhere — including Texas, Florida, and Georgia — an employer may forfeit unused PTO if its written policy says so, though a number of states such as Maryland, New York, and North Carolina default to payout unless that forfeiture policy was put in writing in advance. Always check your employee handbook AND your state law, because both apply.

In the 10 states with mandatory payout laws (CA, CO, IL, LA, ME, MA, MT, NE, ND, RI), no — refusing to pay accrued time is a wage claim. In states with no payout law, yes, provided the employer's written policy says PTO is forfeited at termination. "Use-it-or-lose-it" policies are legal in most states but prohibited in California, Colorado, Montana, and Nebraska.

No. PTO payout is taxed exactly like regular wages — subject to federal income tax, Social Security (6.2%), Medicare (1.45%), and your state income tax. Your employer will withhold taxes and include it on your W-2. There is no special tax rate for vacation payouts.

Use-it-or-lose-it policies are legal in most US states, meaning you can lose accrued PTO at year-end or at termination if you haven't used it. California, Colorado, Montana, and Nebraska prohibit them outright — accrued PTO cannot be forfeited and must be paid out. Illinois, Massachusetts, and North Dakota stop short of banning year-end resets with advance notice, but will not let an employer forfeit earned time at separation.