Payout required by law

Colorado must pay out your unused PTO

Last updated July 31, 2026 · sourced from the Colorado labour department and the US Department of Labor

Does Colorado require PTO payout?

Yes. Colorado treats accrued, unused PTO as earned wages, so your employer must pay it out when you leave, whatever the company policy says. The controlling authority is C.R.S. § 8-4-101(14)(a)(III); Nieto v. Clark's Market, Inc. (2019).

Payout at separation

Payout required by law

If you resign

Next regular payday

If you are fired

Immediately; if payroll is off-site, within 6 hours of next workday or 24 hours if payroll office is off-site

How Colorado treats accrued PTO

Colorado treats earned vacation as wages. Any policy that forfeits earned vacation — including use-it-or-lose-it, no-payout-on-resignation, or forfeiture-for-cause provisions — is void and unenforceable per the Colorado Supreme Court's ruling in Nieto v. Clark's Market. Employers may cap accrual but cannot forfeit what is already earned.

Authority: C.R.S. § 8-4-101(14)(a)(III); Nieto v. Clark's Market, Inc. (2019)

Late payment penalty in Colorado

Penalties and damages may apply for late payment, including daily penalties up to the amount of wages owed.

Statute: Colo. Rev. Stat. § 8-4-104

Your other Colorado entitlements

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

Paid sick leave: Colorado mandates paid sick leave under the Colorado Healthy Families and Workplaces Act, accruing at 1 hour per 40 hours worked, with up to 48 hours usable per year. Sick leave is NOT required to be paid out at termination in Colorado. Check your sick leave balance .
Minimum wage: The Colorado minimum wage is $15.16/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. Colorado minimum wage details .
Overtime: Colorado pays overtime at 1.5x after 40 hours in a week , and after 12 hours in a single day . Unpaid overtime is often owed alongside unpaid PTO, so it is worth checking both before you sign anything. Calculate your overtime .

Work out what Colorado owes you

Enter your salary and unused days to get the gross figure, plus an estimate after withholding, in a format you can paste into an email to HR.

Open the PTO payout calculator

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Frequently Asked Questions

Does Colorado require employers to pay out unused PTO?

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

If you resign in Colorado, the deadline is: Next regular payday. If you are fired or laid off instead, the deadline is: Immediately; if payroll is off-site, within 6 hours of next workday or 24 hours if payroll office is off-site. Any PTO your employer owes you should be included in that payment rather than sent separately later.

What happens if my Colorado employer pays late?

Colorado attaches a penalty to late final wages: Penalties and damages may apply for late payment, including daily penalties up to the amount of wages owed. 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 Colorado employers use "use it or lose it" PTO policies?

Not to strip time you have already earned. Because Colorado treats accrued PTO as wages, an employer may cap how much you accrue going forward but cannot delete a balance you already hold. A policy that forfeits earned time at separation is unenforceable.

Is a PTO payout taxed differently in Colorado?

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 Colorado 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 cheque; it evens out when you file.

PTO payout in other states

Alabama Delaware Illinois Maine Missouri New Mexico Oregon Texas