Every unused PTO day your employees bank is a dollar amount sitting on your books — wages you've committed to but haven't paid. In several states it's a cash payout you legally owe when someone leaves. This free calculator estimates your total PTO liability across your workforce so you can see the number, plan for it, and decide whether it's time to cap it.
Estimate only, for planning purposes. Actual liability depends on each employee's exact accrued balance, pay rate, and your state's payout rules. This is not legal, accounting, or financial advice.
This calculator works off averages. HR and payroll software tracks every employee's real accrued balance, enforces carryover caps, and reports your exact PTO liability in real time — so it never piles up unnoticed.
See the Best HR & PTO Software →When an employee earns paid time off, they're earning a benefit they haven't been paid for yet. Until they either use it or cash it out, that earned-but-unused time is a liability — a future cost the business has already committed to. Accountants record it as accrued payroll on the balance sheet for exactly that reason: it's money owed, just not yet paid.
The liability grows quietly. An employee who banks six unused days a year for three years is carrying eighteen days — and if they're paid more by then, the liability is valued at the higher rate. Multiply that across a whole workforce and a "small" per-person balance becomes a five- or six-figure number most owners have never put a dollar figure on. That's what this calculator surfaces.
The math is straightforward. For each employee:
The payroll burden field accounts for the employer-side costs that ride on top of wages — most commonly the 7.65% employer share of Social Security and Medicare (FICA). If you pay out PTO in cash, you owe those taxes too, so including the burden gives a truer cost. Set it to 0 if you only want the base wage value. For the per-paycheck accrual side of the math, see our PTO accrual rate guide.
Whether this liability is a hard cash obligation or a softer accounting figure depends on your state. Nine states require employers to pay out accrued, unused vacation at separation — seven outright, and two only when a condition is met:
| State | Rule |
|---|---|
| California | Vested vacation is wages; use-it-or-lose-it prohibited |
| Colorado | Accrued vacation is wages owed at separation; a forfeiture clause is void |
| Illinois | Accrued vacation payable under the Wage Payment & Collection Act; a use-by date with written notice is allowed during employment |
| Maine | Conditional: private employers with 11 or more Maine employees, for vacation accrued since 1 January 2023; unpaid amounts carry 2× liquidated damages |
| Massachusetts | Earned vacation is wages; late payment triggers treble damages |
| Montana | Earned vacation is wages (a combined PTO bank follows your policy) |
| Nebraska | Accrued vacation is wages owed at termination |
| North Dakota | No policy may forfeit it; one narrow exception for short-tenure employees who quit without notice |
| Rhode Island | Conditional: owed once the employee has completed one year of service |
In at least eight more jurisdictions — Indiana, Louisiana, Maryland, New York, Ohio, West Virginia, Wyoming and Washington DC — payout is the default: a forfeiture clause works only if it is clear and properly communicated, so a silent handbook leaves you owing the money. In the rest, your written policy controls — but a policy that promises payout creates the same liability by contract. Confirm your obligations in the PTO compliance by state guide, and see what happens to unused PTO at year end for how carryover and forfeiture interact.
If the figure above is bigger than you'd like, three levers reduce it:
PTO liability is the dollar value of paid time off employees have earned but not yet used. Because accrued PTO represents wages employees have a claim to, it sits on an employer's books as a financial obligation — and in several states it must be paid out in cash when an employee leaves. The more unused PTO accumulates, the larger the liability grows.
Multiply each employee's unused PTO hours by their hourly pay rate, then add any employer payroll burden (such as the 7.65% employer share of FICA). For a workforce, take the average unused days per employee, convert to hours, multiply by the average hourly rate and burden, and multiply by headcount. This calculator does that instantly.
Yes. Accrued, unused PTO is a real liability. In states that treat accrued vacation as earned wages, it's a cash obligation owed at separation and is typically carried on the balance sheet as accrued payroll. Even where payout isn't legally required, unused PTO represents future wage cost the business has already committed to.
Seven states require employers to pay out accrued, unused vacation at separation regardless of policy: California, Colorado, Illinois, Massachusetts, Montana, Nebraska and North Dakota. Two more — Maine (private employers with 11 or more Maine employees) and Rhode Island (employees with at least a year of service) — require it when those conditions are met. In all nine, a policy cannot forfeit vacation already earned when the employee leaves, although some, Illinois and Massachusetts among them, allow a use-it-or-lose-it deadline during employment with advance notice. In New York, Maryland, Ohio and several other states payout is the default unless a clear written policy says otherwise; elsewhere it depends on the employer's written policy. See the compliance by state guide.
Set a reasonable carryover cap so balances can't grow without limit (where state law allows), actively encourage employees to use their time off rather than bank it, and track accruals accurately so the liability stays visible. HR and payroll software automates accrual, enforces caps, and reports the liability in real time.
It depends on the state. There's no federal requirement, but California, Colorado, Illinois, Massachusetts, Montana, Nebraska and North Dakota require payout of accrued vacation at separation regardless of policy, and Maine and Rhode Island do when their employer-size or service conditions are met. In other states, your written policy governs — if it promises payout it's enforceable as wages, and if it clearly establishes forfeiture that's generally upheld, though in default-rule states such as New York and Maryland a silent policy means payout is owed.