California must pay out your unused PTO

Yes. Accrued, unused PTO counts as earned wages in California, so it must be paid when you leave, whatever the company policy says.

Data updated September 26, 2026

Key facts for California

PTO payout when you leave: Required by law
Legal authority: California Labor Code § 227.3
Final paycheck if you quit: Within 72 hours of quitting; on the last day if at least 72 hours' notice was given
Final paycheck if fired or laid off: Immediately at the time of discharge
Late final pay: State penalty applies details
Paid sick leave: Required by state law
Minimum wage: $16.90/hr Next change: $17.40/hr effective January 1, 2027
Overtime: 1.5x after 40 hrs/week or 8 hrs/day; 2x after 12 hrs/day

Source

Rule: California Labor Code § 227.3
Published by: dir.ca.gov
Last updated: September 26, 2026

How we source and check data

Work out what you are owed

Salary and unused days in, gross payout and an after-tax estimate out.

Calculate my California PTO payout

California minimum wage All states

Does California require PTO payout?

Yes, in general. California treats earned, unused vacation or PTO as wages, so your employer generally must pay it out when you leave, even if the company policy says otherwise. Some states set limits, such as employer size or length of service, so check the details on this page. The controlling authority is California Labor Code § 227.3.

How California treats accrued PTO

California treats earned vacation and PTO as wages. It vests as earned and cannot be forfeited, so use-it-or-lose-it policies are illegal, though a reasonable accrual cap is allowed. All earned, unused vacation must be paid at the final rate of pay when employment ends for any reason. A combined PTO plan follows the same rules.

Authority: California Labor Code § 227.3

Late payment penalty in California

Waiting time penalty: one day's wages for each day final pay is willfully late, up to 30 days.

Statute: California Labor Code §§ 201-203

Your other California entitlements

PTO payout is one line on your final payslip. These are the other California rules that change what that payslip should total.

Paid sick leave: California mandates paid sick leave under the California Healthy Workplaces Healthy Families Act, accruing at 1 hour per 30 hours worked, with up to 40 hours usable per year. California does not require unused sick leave to be paid out unless your employer's policy provides it. If sick time is part of a general PTO bank, that PTO is treated like vacation and must be paid out. Check your sick leave balance .
Minimum wage: The California minimum wage is $16.90/hr , above the federal $7.25 (effective January 1, 2026). Your PTO payout is paid at your own rate of pay, not the minimum, but the minimum is the floor below which no hour may be paid. California minimum wage details .
Overtime: California pays overtime at 1.5x after 40 hours in a week , and after 8 hours in a single day , with double time beyond 12 hours a day. Unpaid overtime is often owed alongside unpaid PTO, so it is worth checking both before you sign anything. Calculate your overtime .

Sources for this page

California labour department — PTO and wage payment dir.ca.gov
California final paycheck rules — California Labor Code §§ 201-203 dir.ca.gov
US Department of Labor — state wage payment laws dol.gov

Common questions

Does California require employers to pay out unused PTO?

When must my final paycheck arrive in California if I quit?

If you resign in California, the deadline is: Within 72 hours of quitting; on the last day if at least 72 hours' notice was given. If you are fired or laid off instead, the deadline is: Immediately at the time of discharge. Any PTO your employer owes you should be included in that payment rather than sent separately later.

What happens if my California employer pays late?

California attaches a penalty to late final wages: Waiting time penalty: one day's wages for each day final pay is willfully late, up to 30 days. That penalty is separate from the wages themselves, so a late payment can end up costing an employer far more than the original amount. Keep a record of your separation date and the date you were actually paid.

Can California employers use "use it or lose it" PTO policies?

Not to strip earned time when you leave. Because California treats earned PTO as wages, an employer may cap how much you accrue going forward, and a policy that forfeits earned time at separation is generally unenforceable. Whether a year-end reset is allowed varies, so check the details on this page.

Is a PTO payout taxed differently in California?

No. A PTO payout is ordinary wages, so it is subject to federal income tax withholding, Social Security at 6.2%, Medicare at 1.45%, and any California state income tax. Employers often withhold federal tax at the 22% supplemental wage rate on a lump sum, which can make the payout look more heavily taxed than your normal paycheck; it evens out when you file.

PTO payout in other states

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