Payout required by law

Illinois must pay out your unused PTO

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

Does Illinois require PTO payout?

Yes. Illinois 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 820 ILCS 115/5 (Illinois Wage Payment and Collection Act).

Payout at separation

Payout required by law

If you resign

Next regular payday

If you are fired

Next regular payday

How Illinois treats accrued PTO

Illinois treats earned vacation and PTO as wages that must be paid upon separation. Use-it-or-lose-it policies that forfeit earned time at termination are not enforceable. Employers may place reasonable caps on accrual but must pay out all earned, unused time. If the employer combines sick leave and vacation into a PTO bank, the entire unused PTO balance must be paid out. UPDATE 2024: The Illinois Paid Leave for All Workers Act (PLAWA, 820 ILCS 192, effective January 1, 2024) requires employers of all sizes to provide up to 40 hours of paid leave per year for any reason. Leave accrued solely under PLAWA does not require payout upon separation. However, if an employer combines PLAWA leave with vacation/PTO in a single bank, the entire balance must be paid out as wages under IWPCA.

Authority: 820 ILCS 115/5 (Illinois Wage Payment and Collection Act)

Your other Illinois entitlements

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

Paid sick leave: Illinois mandates paid sick leave under the Paid Leave for All Workers Act (PLAWA), accruing at 1 hour per 40 hours worked, with up to 40 hours usable per year. Payout depends on employer policy. If your employer keeps PLAWA leave separate from vacation, NO payout required. If combined with vacation PTO, payout IS required. Check your sick leave balance .
Minimum wage: The Illinois minimum wage is $15.00/hr , above the federal $7.25 (effective January 1, 2025). 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. Illinois minimum wage details .
Overtime: Illinois pays overtime at 1.5x after 40 hours in a week . Unpaid overtime is often owed alongside unpaid PTO, so it is worth checking both before you sign anything. Calculate your overtime .

Work out what Illinois 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 Illinois require employers to pay out unused PTO?

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

If you resign in Illinois, the deadline is: Next regular payday. If you are fired or laid off instead, the deadline is: Next regular payday. Any PTO your employer owes you should be included in that payment rather than sent separately later.

What can I do if my Illinois employer will not pay?

Put the request in writing first, citing the amount and how you calculated it, because a dated written demand matters if you escalate. If that fails you can file a wage claim with the Illinois labour agency. Illinois does not attach a specific statutory late penalty in our dataset, so the claim is for the wages owed.

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

Not to strip time you have already earned. Because Illinois 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 Illinois?

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 Illinois 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 Connecticut Idaho Maine Missouri New Mexico Oregon Texas