Payout worksheet
Vacation Payout Calculator
Estimate net vacation payout using supplemental withholding for federal and state taxes.
Maintained by Austin Witherow · Updated
Estimated net payout
$1,752.00
- Gross payout
- $2,400.00
- Federal withholding
- $528.00
- State withholding
- $120.00
Formula
Gross payout = Vacation hours × Hourly rateFederal withholding = Gross payout × (Federal supplemental rate ÷ 100)State withholding = Gross payout × (State rate ÷ 100)Net payout = Gross payout − Federal withholding − State withholding Example: 80 hours at $30 an hour is a $2,400 gross payout; at 22% federal and 5% state, withholding is $528 + $120 and the net is $1,752.
Key caveat
This calculator estimates income tax withholding only: it does not subtract FICA (Social Security 6.2% + Medicare 1.45%), local taxes, garnishments, or benefit deductions.
What this calculator is for
What is your unused vacation actually worth in cash — and what will you take home after taxes? This vacation payout calculator multiplies your accrued hours by your pay rate to get the gross payout, then applies a federal supplemental withholding rate and a state rate to estimate the net. It uses the same supplemental-wage treatment the IRS prescribes for vacation payouts paid on top of regular wages, and it shows the math line by line so you can check every number against your final pay stub.
How it works
First, we calculate your gross vacation payout by multiplying the number of vacation hours being paid out by your hourly rate: Gross = Hours × Hourly rate.
You enter a federal supplemental withholding rate, the flat percentage payroll commonly applies to lump-sum payments such as bonuses and vacation payouts. The IRS optional flat rate for supplemental wages is 22% (37% on supplemental wages above $1 million in a year), and the calculator's default reflects it. The tool multiplies your gross payout by this percentage to estimate federal income tax withheld.
You also enter a state withholding rate as a flat percentage. We multiply the same gross payout by this state rate to estimate state income tax withholding. Some people fold local or city income taxes into this percentage for simplicity.
We then add the estimated federal and state withholding amounts together and subtract the total from your gross vacation payout to get an estimated net payout: Net = Gross − Federal − State.
The result shows how large the vacation payout is before taxes, how much may be withheld under the chosen rates, and how much might actually arrive in your account.
Real paychecks also include Social Security and Medicare (FICA) and sometimes local taxes or other deductions; those are outside this income-tax-only estimate — see the limitations for how to account for them.
Quick calculator insights
A vacation payout is a supplemental wage
IRS Publication 15 treats vacation pay paid on top of regular wages — like an annual lump sum for unused leave — as a supplemental wage payment. That is why payroll departments withhold on it with a special percentage instead of your normal bracket table.
- Source
- IRS Publication 15 (2026), section 7
- Consequence
- Flat-rate withholding instead of your regular bracket table
22% is withholding, not your tax
The optional flat federal method withholds 22% of the payout (37% above $1 million of supplemental wages in a year) — Publication 15's own example withholds $220 from a $1,000 bonus. Your actual tax depends on your full-year income: too much withheld comes back as a refund, too little is owed in April.
- The flat method
- 22% federal, or 37% above the $1M threshold
- Settled where
- On your annual return, not on the paycheck
FICA comes out of a real payout too
Social Security (6.2%) and Medicare (1.45%) apply to vacation payouts as wages. This calculator deliberately estimates income tax withholding only, so subtract about 7.65% of the gross yourself for a fuller picture — $183.60 on a $2,400 payout.
- Social Security
- 6.2% of wages (2026)
- Medicare
- 1.45%, no wage base limit
Does your state require the payout? (state agency pages read directly)
| State | Rule at separation | Source |
|---|---|---|
| California | Earned, unused vacation must be paid at your final rate of pay; 'use it or lose it' forfeitures are not recognized; reasonable accrual caps are allowed | CA DIR, Labor Commissioner vacation FAQ (Labor Code §227.3) |
| New York | Depends on the vacation/resignation policy: with no written forfeit condition, accrued vacation must be paid; a written, communicated forfeit policy can be enforceable | NY DOL Wages and Hours FAQ |
| Texas | Accrued-leave payouts are required only if promised in a written policy or agreement; with no such policy, nothing is owed | TWC Employment Law Guide: Accrued Leave Payouts |
How the federal withholding methods differ (IRS Pub. 15, sec. 7)
| Method | How it withholds | Applies when |
|---|---|---|
| Flat 22% | Withholds a flat 22% of the supplemental payment | Supplemental wages identified separately, under $1M, and income tax was withheld from regular wages |
| Flat 37% | Withholds 37% of the excess | Supplemental wages above $1 million in the calendar year |
| Aggregate | Adds the payout to your recent regular wages and withholds on the combined amount from the tables | Chosen by the employer, or when the flat method's conditions are not met |
How to use this calculator
- 01Enter the number of vacation hours your employer will pay out — for example, 40 hours for one week or 80 hours for two weeks of PTO. If your balance is in days, multiply by your hours per workday (usually 8) first.
- 02Enter your regular hourly rate for those hours. If you are salaried, convert first: annual salary ÷ 2,080 (40 hours × 52 weeks) is the standard hourly equivalent.
- 03Enter the federal supplemental withholding rate your employer uses for payouts — 22% is the IRS optional flat rate and the common default.
- 04Enter your state income tax withholding rate as a flat percentage. Add local income taxes into this number if you want them covered.
- 05Review the gross payout, estimated federal withholding, estimated state withholding, and net payout.
- 06Compare the net against the gross to see the withholding slice, and check the state table below to see whether your state requires the payout at all.
Inputs explained
- Vacation hours paid out
- The number of unused vacation or PTO hours that will be converted into cash. This often appears on your final pay stub or separation paperwork. If your balance is quoted in days, multiply by your hours per workday (typically 8) to get hours. Whether a payout happens at all depends on your state's law and your employer's written policy — see the state table below.
- Hourly rate
- Your pay rate per hour for those vacation hours. Salaried employees can divide annual salary by 2,080 (40 hours × 52 weeks) for the hourly equivalent — a $72,800 salary is $35 an hour. In states that treat vacation as wages, such as California, the payout is owed at your final rate of pay.
- Federal supplemental withholding rate (%)
- The percentage your employer uses to withhold federal income tax from supplemental pay such as bonuses and vacation payouts. The IRS optional flat method withholds a flat 22% (37% if your supplemental wages for the year exceed $1 million); if your employer instead uses the aggregate method, the withholding is computed against your regular wage brackets. Withholding is a prepayment, not your final tax.
- State withholding rate (%)
- Your state income tax withholding as a flat percentage of the payout. States tax these payments differently — some apply their own flat supplemental rates, others withhold as if the payout were regular wages. Add local income taxes to this figure if you want them included.
Outputs explained
- Gross payout
- Vacation hours × hourly rate — the full cash value of the paid-out time before any withholding.
- Federal withholding
- Gross × the federal supplemental rate you enter. With the common 22% flat method, $2,400 of vacation pay has $528 withheld.
- State withholding
- Gross × the state rate you enter — a flat-percentage estimate of state income tax withheld.
- Net payout
- Gross − federal − state: the estimated deposit. FICA (about 7.65% combined) also comes out of a real payout but is outside this income-tax estimate.
Worked examples
Example 1: Two weeks of vacation at $30 an hour
- Vacation hours = 80, hourly rate = $30, federal supplemental rate = 22%, state rate = 5%.
- Gross payout = 80 × $30 = $2,400.
- Federal withholding = $2,400 × 22% = $528; state withholding = $2,400 × 5% = $120.
- Net payout = $2,400 − $528 − $120 = $1,752.
- FICA would also take about 7.65% of the gross ($183.60) in a real paycheck — this tool is income tax only.
Example 2: California's own worked example — 72 hours at $13
- California's Labor Commissioner FAQ computes a terminating employee's vacation pay: 72 earned-but-unused hours at the final $13.00 rate = $936.00 gross.
- Run it here: gross = 72 × $13 = $936; federal withholding at 22% = $205.92.
- State withholding at an example 5% rate = $46.80.
- Net payout = $936 − $205.92 − $46.80 = $683.28. California withholds state income tax on its own progressive tables, so treat the 5% as a placeholder for your real state rate.
Example 3: Salaried employee, ten unused vacation days
- Salary = $72,800 → hourly equivalent = $72,800 ÷ 2,080 = $35.
- Unused vacation: 10 days × 8 hours = 80 hours.
- Gross payout = 80 × $35 = $2,800.
- Federal withholding at 22% = $616; state at 5% = $140.
- Net payout = $2,800 − $616 − $140 = $2,044.
Example 4: One week of PTO at $28 an hour
- Unused vacation: 5 days × 8 hours = 40 hours at $28 an hour.
- Gross payout = 40 × $28 = $1,120.
- Federal withholding at 22% = $246.40; state at 5% = $56.
- Net payout = $1,120 − $246.40 − $56 = $817.60.
When to use it
- Estimating the cash value of accrued vacation or PTO when you leave a job or cash out time.
- Checking whether the withholding on a final paycheck looks right against the 22% supplemental method.
- Comparing a payout against the value of actually taking the time off.
- Sizing a payout before negotiating one with HR under a use-it-or-lose-it deadline.
- Converting a salary to an hourly equivalent to price salaried vacation time.
Tips
- A $72,800 salary is $35 an hour at 2,080 hours a year — divide your own salary by 2,080 (or your actual weekly hours × 52) before entering the rate.
- Withholding is not tax owed: if your true rate is lower than 22% federal plus state, the over-withholding comes back in your refund; if it is higher, you owe the difference in April.
- FICA is real: Social Security (6.2%) and Medicare (1.45%) also come out of a vacation payout. This calculator is income-tax only — subtract about 7.65% of the gross yourself for a fuller picture.
- In states that treat vacation as wages, the payout must use your final rate of pay — a late-year raise raises the value of every banked hour.
- Your pay stub balance may lag your final accrual; add anything earned since the stub was issued before you estimate.
Limitations
- This calculator estimates income tax withholding only: it does not subtract FICA (Social Security 6.2% + Medicare 1.45%), local taxes, garnishments, or benefit deductions.
- The federal and state rates are flat percentages you enter. Real state withholding on supplemental wages varies by state formula, and the aggregate method folds the payout into your regular wage brackets instead of a flat rate.
- Whether a payout is owed at all is a legal question this tool does not answer for you — it depends on your state's law and your employer's written policy (see the state table).
- The tool takes an hourly rate; salaried employees must convert first (annual salary ÷ 2,080 is standard, but your actual weekly hours may differ).
- State rules change and are enforced differently; the state rows below were read from each state agency's own pages on the date shown and are summaries, not legal advice.
- A payout of vacation time is not the same as cashing out sick leave: state sick-leave rules differ from vacation rules, and a combined PTO bank usable for any purpose can be treated as vacation — California's FAQ (Q8) applies vacation rules to such banks.
Calculator guide
Use this vacation payout calculator to estimate the gross cash value of unused vacation or PTO, the 22% federal supplemental withholding, state withholding, and your net payout.
Enter vacation hours, your hourly rate (or salary ÷ 2,080), and withholding rates to see what a PTO cash-out leaves in your account.
See how vacation payouts are taxed as supplemental wages, and whether your state requires the payout at separation.
Methodology & assumptions
- The engine is four operations on your inputs: gross = hours × rate; federal = gross × fed%; state = gross × state%; net = gross − federal − state. Worked examples are asserted against the engine by an automated test (src/lib/__tests__/vacation-payout.test.ts).
- The federal default (22%) follows IRS Publication 15 (2026), section 7: vacation pay in addition to regular wages is a supplemental wage, and the optional flat method withholds a flat 22% (37% above $1 million of supplemental wages in a calendar year) — Publication 15's Example 3 withholds exactly $220 from a $1,000 bonus.
- The FICA figures (6.2% Social Security, 1.45% Medicare) come from Publication 15 (2026)'s What's New section; they are described in the copy and limitations because the engine does not subtract them.
- The state-law table lists only states whose labor-agency pages were read directly for this update (California DIR, New York DOL, Texas Workforce Commission, each on 2026-10-24); other states are deliberately not asserted.
- The salary-to-hourly conversion (÷ 2,080) and the days-to-hours conversion (× 8) are standard arithmetic described in the copy; the engine accepts hours and an hourly rate only.
- Combined federal + state rates above 100% are rejected by the page's validation ('Federal and state withholding rates cannot total more than 100%.') before a result is shown; the underlying computation engine would otherwise return a negative net, which the automated test asserts at the engine layer.
Sources
Last reviewed 2026-10-24
- IRS Publication 15 (2026) (Circular E), Employer's Tax Guide — section 7, Supplemental Wages
Vacation pay as supplemental wages, the optional flat 22% method (37% above $1M), the aggregate alternative, and the $220-on-$1,000 example. Read directly 2026-10-24.
- California DIR, Labor Commissioner's Office: Vacation FAQ
Earned vacation as wages, Labor Code §227.3, payout at the final rate, the 72-hours-at-$13 = $936 example, and the use-it-or-lose-it/cap rules. Read directly 2026-10-24.
- New York State Department of Labor: Wages and Hours FAQ
Vacation payout at separation depends on the written policy; with no written forfeit condition, accrued vacation must be paid. Read directly 2026-10-24.
- Texas Workforce Commission: Accrued Leave Payouts (Employment Law Guide)
Accrued-leave payouts are required under the Texas Payday Law only if promised in a written policy or agreement. Read directly 2026-10-24.
FAQs
How do I calculate my vacation payout?+
Multiply your unused vacation hours by your hourly rate, then subtract withholding. 80 hours at $30 is a $2,400 gross payout; at 22% federal and 5% state withholding, the net is $1,752. If your balance is in days, multiply by your hours per workday first; if you are salaried, divide your annual salary by 2,080 for the hourly rate.
Is vacation cash-out required in Texas?+
Only if your employer promised it. The Texas Payday Law requires accrued-leave payouts only when a written policy or agreement promises them — the Texas Workforce Commission puts it plainly: 'Payouts of accrued leave are required under the Texas Payday Law only if such a payment is promised by the employer in a written policy or agreement.' Without such a policy, an employer owes nothing at separation.
Does New York require vacation payout when you leave?+
It depends on the policy. The New York DOL's rule: if an employee has earned vacation and there is no written forfeit policy, the employer must pay it — but New York courts allow a written policy to specify conditions under which accrued vacation is lost, as long as employees were told in writing. Check your handbook's vacation and resignation sections before assuming either way.
What about California vacation payout?+
California treats earned vacation as wages. Under Labor Code §227.3, all earned and unused vacation must be paid at your final rate of pay when employment ends, for any reason — and the Labor Commissioner does not enforce 'use it or lose it' forfeitures, though reasonable accrual caps are allowed. California's own FAQ example: 72 accrued hours at a final $13.00 rate is $936.00 due at separation.
How is a vacation payout taxed?+
As a supplemental wage: many employers withhold federal income tax at a flat 22% (37% if your supplemental wages for the year top $1 million), plus FICA — Social Security at 6.2% and Medicare at 1.45% — plus state income tax where applicable. This calculator estimates the income-tax piece only; subtract roughly 7.65% more for FICA.
Is the 22% withholding the tax I actually owe?+
No — it is a prepayment. Your real tax depends on your total annual income, and the difference is settled on your return. If you earn moderately and your effective rate is well below 22% federal plus state, expect part of the withholding back as a refund; if the payout pushes you into a higher bracket, you may owe more in April.
How do I turn my salary into an hourly rate for the payout?+
Divide your annual salary by 2,080 — 40 hours × 52 weeks, the standard full-year hours. A $72,800 salary is $35 an hour, so 80 banked hours are worth $2,800. Use your final rate: if you got a raise, every banked hour is paid at the new rate in states that treat vacation as wages.
How do I convert my vacation hours into days?+
Divide the hours by your workday length — 8 hours is standard: 40 hours is 5 days, 80 hours is 10 days, 120 hours is 15 days. Multiply the days by 8 (or your schedule) to go back the other way before entering hours above.
Do I get paid for unused vacation if I quit?+
It depends on where you work. In states that treat vacation as wages (California among them), earned vacation must be paid whether you quit or are fired. In New York, it must be paid unless a written forfeit policy says otherwise. In Texas, it is owed only if the employer's written policy promises it — and where a state has no payout statute, the written policy is likewise what decides. The table above summarizes the three states whose agency pages we read directly; check your own state's labor department for its rule.
Does this calculator include Social Security and Medicare?+
No — it is an income-tax-withholding estimate, matching the page's model. Real payouts also have FICA withheld (6.2% Social Security up to the wage base plus 1.45% Medicare), roughly 7.65% of the gross. Subtract that from the net shown here for a closer guess, or use the gross figure and ask HR for your final pay stub.
Can my employer withhold more than 22% for federal tax?+
Yes. The 22% flat method is optional for the employer, and the aggregate method — adding the payout to your regular wages and using the withholding tables — can take more or less depending on your situation. Some employers also honor extra withholding you request on a W-4 or equivalent. Compare your pay stub's federal line to the gross × 22% figure to see which method was used.
Is a vacation payout the same as a PTO cash-out?+
The math is the same — hours times rate minus withholding — but the legal treatment can differ: California's FAQ, for example, applies vacation rules to a combined PTO bank usable for any purpose, which makes it payable at separation there, while separate sick-leave banks often are not payable. Your employer's written policy and your state's rules decide.
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This vacation payout calculator estimates gross payout, income-tax withholding, and net from the hours, rate, and percentages you enter. It does not subtract FICA or local taxes, does not decide whether a payout is legally owed, and is not legal or tax advice. State payout rules and withholding formulas vary and change — check your state labor department, your employer's written policy, and your final pay stub for the authoritative numbers.