California has some of the strongest PTO payout protections in the country. Under Labor Code § 227.3, accrued vacation and PTO are treated as earned wages — once you earn it, your employer cannot take it away, and it must be paid out in full when you leave. Enter your hours and rate below for a gross estimate.
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Calculate your PTO payout
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Assumes 40 hours/week, 52 weeks/year (2,080 hrs). See assumptions.
Estimated gross PTO payout
Effective hourly rate
PTO hours paid out
Gross estimates only — not legal, payroll, or tax advice. See methodology.
📋 California PTO payout at a glance
Payout required
Yes — Labor Code § 227.3
Use-it-or-lose-it
Prohibited by law
Accrual caps
Allowed (reasonable cap)
Sick leave payout
No (standalone sick leave)
How California PTO payout works
California treats accrued vacation time and PTO as wages that belong to the employee the moment they are earned. This comes from California Labor Code § 227.3, which has been interpreted consistently by the state’s Division of Labor Standards Enforcement (DLSE) to prohibit any policy that forfeits earned leave.
Payout is mandatory at termination. When employment ends — for any reason, including termination for cause, layoff, or resignation — your employer must include all accrued, unused PTO in your final paycheck. No forfeiture clause in an employer policy can override this.
Use-it-or-lose-it is illegal. California prohibits policies that cause employees to forfeit vacation time they have already earned. An employer may cap how much PTO accrues (stopping accrual once you reach the cap), but that is different from forfeiture. A cap is legal; erasing earned time is not.
Final paycheck timing is strict. If terminated or laid off: final paycheck at the time of termination. If you resign with 72+ hours notice: final paycheck on your last day. If you resign with less than 72 hours notice: within 72 hours of notice. Late payment can trigger waiting time penalties of up to 30 days’ wages.
Sick leave is treated differently. California’s mandatory sick leave (SB 616: 5 days/40 hours per year) is not required to be paid out at termination when it stands alone. If your employer combines vacation and sick time into a single PTO bank, the entire balance is typically treated as vacation — and must be paid out.
How this calculator works
The calculator estimates gross PTO payout by multiplying unused PTO hours by your effective hourly rate. For salaried employees, the hourly equivalent is calculated by dividing annual salary by 2,080 (40 hours/week × 52 weeks). This is the most common conversion method, but your employer may use a different divisor.
For California employees, the calculation assumes all accrued hours represent earned wages under Labor Code § 227.3. The calculator uses your final hourly rate or salary-equivalent. Individual circumstances — such as commission-based pay or shift differentials — may affect the actual rate under California case law. Results are gross estimates before taxes. See our full methodology and sources.
Example calculations
Hourly employee — 32 unused hours at $21/hr
32 hours × $21.00/hr = $672 gross. Taxes will reduce the amount received.
Under California law, this payout is required regardless of any use-it-or-lose-it clause in the employer's policy.
California requires the final paycheck — including this PTO amount — at the time of termination or on the last day for resignations with 72+ hours notice.
Employee with combined PTO bank — 60 hours including sick time
60 hours × $18/hr = $1,080 gross. Because the employer uses a single combined PTO bank for vacation and sick leave, California treats the entire balance as vacation wages subject to mandatory payout.
If the sick leave were tracked separately in a standalone bank, only the vacation portion would be required for payout.
Frequently asked questions
Yes — if your employer offers vacation or PTO, California Labor Code § 227.3 treats accrued, unused vacation and PTO as earned wages. That means your employer must pay out your full accrued balance in your final paycheck when employment ends, whether you quit, are fired, or are laid off. The reason for separation does not change this obligation. Employers are not required to offer PTO in the first place, but once they do and you earn it, they cannot take it away.
No. California prohibits use-it-or-lose-it vacation and PTO policies because they would effectively forfeit earned wages. Once you accrue PTO under California law, it is yours and must carry over to the following year. However, California law does allow employers to cap total accrual — once you reach the cap, no more PTO accrues until you use some. A cap is different from forfeiture: you keep what you've earned, you just stop earning more until you're below the cap.
The timing depends on the circumstances of separation. If you are terminated or laid off, the final paycheck — including all accrued PTO — must be provided at the time of termination. If you resign and give at least 72 hours notice, the employer must pay your final wages including PTO on your last day. If you resign with less than 72 hours notice, the employer has 72 hours from notice to pay. Late payment of final wages in California can trigger waiting time penalties of up to 30 days of wages.
Generally no — standalone sick leave is treated differently from vacation and PTO under California law. California requires employers to provide at least 40 hours (5 days) of paid sick leave per year under SB 616, but sick leave by itself is not required to be paid out at termination. However, if your employer uses a combined PTO bank that merges vacation and sick time together, the entire balance is typically subject to the payout requirement because the combined bank is treated as vacation.
California Labor Code § 227.3 requires the payout to be at the employee's final rate of pay. For hourly workers, that is your current hourly wage. For salaried employees, it is your effective hourly equivalent based on your final salary. Note that California courts have addressed whether the 'final rate' must include bonuses, commissions, or shift differentials — the answer can depend on your specific circumstances. This calculator uses your stated hourly rate or salary-equivalent as the basis.
Failing to pay out accrued PTO at termination is treated the same as failing to pay earned wages under California law. Employers who willfully fail to pay can face waiting time penalties equal to the employee's daily wage for up to 30 days, in addition to the unpaid PTO amount itself. Employees can file a wage claim with the California Department of Labor Standards Enforcement (DLSE) at no cost, or pursue a civil lawsuit. Attorney's fees may also be recoverable.
Information on this page is based on California Labor Code § 227.3, DLSE interpretive guidance, and publicly available California Department of Industrial Relations resources. Rules are subject to change and individual circumstances vary. Verify with the California Division of Labor Standards Enforcement or a qualified employment attorney.
Estimates and information only. This content is for general educational purposes and is not legal, tax, or payroll advice. PTO payout rules depend on your state law and your employer’s written policy — this calculator cannot determine whether you are legally owed a payout. Verify final-pay and PTO rules with your state’s labor agency, your written policy documents, and a qualified professional before making decisions. See our methodology and sources.