How to calculate PTO accrual per pay period
First convert the annual allowance into hours: PTO days × hours per workday. Then divide by the number of pay periods in a year: 52 for weekly, 26 for biweekly, 24 for semi-monthly and 12 for monthly payroll.
Example: 15 days of PTO at 8 hours a day are 120 hours a year. With biweekly payroll, the employee accrues 120 ÷ 26 = 4.62 hours each pay period. After 10 pay periods, 46.15 hours have accrued; if 16 hours were taken, the balance is 30.15 hours.
Accrual per hour worked
For hourly and part-time staff, PTO is often accrued per hour worked instead. The rate is the annual PTO hours divided by the hours of a full-time year, usually 2,080 (40 hours × 52 weeks). For 120 hours of PTO, that is 0.0577 hours per hour worked, or about 1 hour for every 17.3 hours worked.
Paid sick leave laws in many states and cities set their own minimum accrual rate, for example 1 hour for every 30 hours worked. Check the rules where your employees work.
Is PTO required by law?
No federal law in the US requires employers to offer paid vacation; PTO is set by company policy or contract. Some states require that accrued, unused vacation be paid out when employment ends, California among them, and some limit use-it-or-lose-it policies.
In the UK, workers are entitled to 5.6 weeks of paid annual leave a year under the Working Time Regulations 1998, which is 28 days for a five-day week. Bank holidays can be counted towards it.
Legal basis and sources
- Fair Labor Standards Act: no federal requirement for paid vacation or holidays (U.S. Department of Labor)
- California Labor Code § 227.3 (vested vacation paid out at termination)
- UK: Working Time Regulations 1998, regulations 13 and 13A (5.6 weeks of annual leave)