PTO Accrual Methods: Per Hour, Per Pay Period, Lump Sum

How each accrual method is calculated, the formulas, caps and carry-over, with examples for 80 and 120 hours a year.

Actualizado 2026-10-20

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Paid time off accrues in one of three ways. The annual total can be identical; the timing and the behaviour for part-time or variable-hour staff differ.

Per hour worked

accrual rate = annual PTO hours ÷ annual work hours
accrued      = hours worked × accrual rate

80 hours a year over 2,080 work hours is 0.03846 hours of PTO per hour worked. An 80-hour pay period accrues 3.08 hours. Part-timers accrue proportionally, and overtime hours often count. This is the method required by many state sick-leave laws (1 hour per 30 worked is common).

Per pay period

accrued per period = annual PTO hours ÷ pay periods per year

80 hours over 26 bi-weekly periods is 3.08 hours each period regardless of hours worked. Simple for full-time salaried staff; unfair to part-timers unless prorated.

Lump sum (front-loaded)

The whole annual allowance is granted on January 1 or the anniversary date. Easy to administer; employers often require repayment if an employee leaves after using more than they would have accrued.

Worked comparison, 120 hours a year

With 90 hours worked in a period, per-hour accrues 5.19 while per-period stays at 4.62.

Caps and carry-over

An accrual cap stops accrual when the balance hits a ceiling (often 1.5x the annual allowance). Carry-over limits how much unused PTO moves to the next year; the rest is forfeited or paid out. California prohibits use-it-or-lose-it forfeiture but allows caps. Some states require payout of accrued PTO on termination.

Waiting periods

Many plans accrue from day one but block use for 90 days. The balance still grows during the wait.

Projecting a balance

Balance on a date = current balance + (periods until date × accrual per period) − planned use, limited by the cap. The PTO Accrual Calculator does this period by period and shows when you will have enough for a planned trip.

State sick-leave accrual rules

Many states and cities mandate paid sick leave with a per-hour accrual rate and a minimum annual amount:

These laws apply the per-hour method because it treats part-time workers fairly. An employer’s PTO plan can satisfy them if it accrues at least as fast and can be used for sick time.

Negative balances and advances

Some employers let employees borrow against future accrual. If the employee leaves, deducting the negative balance from the final paycheck is restricted in many states and prohibited in some; the usual advice is to allow advances only with a signed agreement.

Payout on termination

California, Colorado, Illinois, Massachusetts, Montana, Nebraska, North Dakota and several others treat accrued vacation as earned wages that must be paid out. Others defer to the written policy. Sick leave is generally not paid out unless combined into a single PTO bank, which is one reason some employers keep them separate.

Frequently asked

How much PTO do I accrue per pay period for 15 days a year? 120 hours ÷ 26 = 4.62 hours per bi-weekly period, or 5 hours semi-monthly.

Do overtime hours accrue PTO? Under per-hour plans usually yes, unless the policy caps accrual at 40 hours a week. Check the handbook.

What happens when I hit the cap? Accrual pauses until you use some; it does not go negative or get banked. Use-it-or-lose-it forfeits time at year end; a cap merely stops new time accruing.

Is unlimited PTO really unlimited? There is no accrual and nothing to pay out at termination, which is part of the appeal to employers. Usage in practice is set by team norms.