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Unused PTO Liability Calculator

Reviewed for 2026, updated September 8, 2026.

Estimates the dollar value of accrued, unused PTO sitting on your books today and where it will be in a year, for finance leads and small business owners.

Your numbers

Results update as you type.

Your estimate

Current PTO liability...
Liability per employee...
Projected liability in 12 months...
Change over 12 months...

Estimates only. Assumptions are listed below, and you can change every input.

Every accrued hour an employee has not taken is money the company owes, and in many states it must be paid out at separation. Most small businesses have no idea what that number is until an accountant asks for it at year end or someone with 300 banked hours resigns. Knowing the figure is the first step to deciding whether you need a cap, a use it or lose it rule, or a planned payout.

The tool multiplies headcount by the average unused hours and the average hourly wage, then adds the employer payroll tax share that applies to a payout. To project next year it adds the average net hours employees bank per year and applies your expected wage growth, because the same hours cost more after raises. The result is an estimate built on averages; a balance sheet figure needs each employee's actual balance and pay rate.

How to use this tool

  1. Enter headcount, the average unused hours per person and the average hourly wage.
  2. Adjust the payroll tax rate for your state and enter how many net hours employees typically bank each year.
  3. Read the current liability, the per employee figure and where the total lands after a year of accrual and raises.

What the math assumes

  • Liability equals unused hours times the hourly wage, plus the employer payroll tax percentage you enter; the 7.65% default is the federal employer share of Social Security and Medicare.
  • Averages are applied to every employee, so a few people with very large balances are smoothed out.
  • The 12 month projection adds the net hours banked per employee and applies one year of wage growth; balances cannot go below zero.
  • No accrual cap or forfeiture is applied; if your policy caps balances, the projection may overstate growth.
  • Whether accrued PTO must be paid out depends on state law and your written policy; the tool values the hours regardless of payout obligation.

Frequently asked questions

Is accrued PTO a liability on the balance sheet?

Under US GAAP, compensated absences that vest or accumulate, are probable to be paid and can be reasonably estimated are accrued as a liability. Your accountant will use each employee's actual balance and rate; this tool gives a quick estimate from averages.

Which states require paying out unused PTO?

Rules vary by state and change over time. Some states treat earned vacation as wages that must be paid at separation, others defer to the company's written policy. Check your state labor department and put the rule in your handbook.

How do I get the average unused hours figure?

Export balances from your leave tracker or payroll system, add them up and divide by headcount. If you only have days, multiply by hours per workday first.

Why does the projection grow faster than the wage increase?

Two things compound: employees bank more hours, and every banked hour, old or new, is valued at the higher future wage.

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More free tools from LeaveLedgr

  • PTO Accrual Rate Calculator: Turns an annual PTO allowance into an accrual amount per pay period and projects an employee's balance, for HR teams and small business owners setting up leave policies.
  • Team PTO Coverage Capacity Planner: Shows how many people can be off at once, how many are absent on a typical day and whether your team's leave entitlement actually fits your minimum staffing rule, for managers and team leads.

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