Most workers underestimate how much their paid time off is actually worth. When comparing job offers or evaluating a PTO cash-out offer, knowing the real dollar value of each PTO day is essential. Here's the exact formula — for both hourly and salaried workers.
PTO is a form of compensation. When Job A offers $75,000 with 10 PTO days and Job B offers $73,000 with 20 PTO days, which pays more?
If your employer offers to cash out unused PTO, remember: that payment is taxable income. It will be added to your wages and taxed at your marginal federal rate plus state taxes and FICA.
| Gross PTO Cash-Out | 22% Fed Bracket | FICA (7.65%) | Approx. Net |
|---|---|---|---|
| $1,000 | $220 | $76.50 | ~$703 |
| $2,500 | $550 | $191.25 | ~$1,759 |
| $5,000 | $1,100 | $382.50 | ~$3,517 |
Enter your salary and number of PTO days to get the exact cash value — and your net after taxes.
Use the PTO Calculator →It depends entirely on your state. California, for example, treats accrued PTO as earned wages and requires it to be paid out at termination. Most other states leave it up to employer policy. Check your state's Department of Labor website or your employee handbook.
PTO (Paid Time Off) is an umbrella term that often includes vacation days, personal days, and sometimes sick days in a single bank. Some employers separate sick leave from vacation. The cash value formula is the same regardless of the category.
For state-specific PTO payout laws, reference your state's Department of Labor. The US Department of Labor's Wage and Hour Division also provides guidance on compensation and leave policies.