Estimate the cash payout value of your accrued, unused Paid Time Off (PTO) or vacation days instantly — free, no signup required.
Cashing out accrued vacation days (Paid Time Off) is a great way to convert unused benefit days into gross cash. To calculate the payout manually, you must first calculate your daily salary rate, then multiply it by the number of accrued leave days you want to sell.
To automatically calculate a vacation cash-out payout in Excel or Google Sheets, use this formula where Cell A1 contains your Annual Salary, Cell B1 contains your standard workdays per year (usually 260), and Cell C1 contains your unused accrued leave days:
=(A1 / B1) * C1
Why 260? A standard full-time employee working 40 hours per week works exactly 260 days per year (5 days/week × 52 weeks).
Before cashing out accrued Paid Time Off (PTO), check your company’s employee handbook and state laws. Some states (like California, Colorado, and Illinois) classify accrued vacation as earned wages, meaning "use-it-or-lose-it" policies are illegal, and employers must pay out all unused accrued vacation upon separation from the company. Our Hours Worked Calculator can help you track exact shift logs before submitting final timecards to HR.
In the United States, the Internal Revenue Service (IRS) treats vacation cash-outs and accrued PTO payouts as **supplemental wages**. Supplemental wages are typically taxed at a flat federal withholding rate of **22%** (excluding standard Medicare, Social Security, and state taxes). This means your net take-home pay from a vacation payout might appear lower than your standard wage rate due to these upfront withholding taxes.
Quick answers to common questions about cashing out unused Paid Time Off (PTO).
To calculate the value of selling leave days, divide your base salary by your standard working days to find your daily salary rate, then multiply by the number of unused vacation days. For example, if you earn an annual salary of $52,000 based on a standard 260-workday year, your daily rate is $200.00 ($52,000 ÷ 260). If you sell 5 days, your gross cash-out payout is $1,000.00 ($200.00 × 5).
Yes, under IRS guidelines, vacation payouts are classified as supplemental wages. Supplemental wages are withheld at a flat federal tax rate of 22% (plus standard FICA, Medicare, and state tax withholdings). This upfront withholding can cause vacation cash-outs to appear taxed higher than your standard hourly pay rates or salaries on your pay stub.
Yes, under California labor law, accrued vacation time is legally classified as a form of earned wages that vests as work is performed. When an employee is separated from employment (resignation or termination), any unused accrued vacation days must be paid out at the employee's final rate of pay. "Use-it-or-lose-it" vacation policies are completely illegal in California.
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