How to Calculate PTO Accrual
Every PTO plan answers one question: how much paid time off does someone earn per unit of work? Pick a method, derive the rate, and the rest is multiplication.
The three accrual methods
Per hour worked: employees earn a fraction of an hour of PTO for each hour worked (e.g., 1 hour per 30 worked — the common sick-leave standard). Per pay period: a fixed amount each payday. Lump sum: the full annual bank granted up front.
Deriving the accrual rate
Start from the annual target. For 80 hours (2 weeks) of PTO per year: per-pay-period on a biweekly schedule is 80 ÷ 26 = 3.08 hours per paycheck; per-hour for a full-timer is 80 ÷ 2,080 = 0.0385 hours of PTO per hour worked.
Hourly accrual scales automatically for part-timers — a 20-hour/week employee simply accrues half as fast.
Caps, carryover, and payout
Most plans cap the bank (commonly 1.5× the annual rate) and define year-end carryover. Note that some states treat earned PTO as wages that must be paid out at separation and restrict use-it-or-lose-it policies — check your state before finalizing the policy.
FAQ
How is PTO accrual calculated per hour?
Annual PTO hours ÷ annual work hours. For 80 hours of PTO on a 2,080-hour year, the rate is 0.0385 PTO hours per hour worked.
How much PTO is normal?
US small businesses commonly offer 10–15 paid days off per year plus holidays, often rising with tenure.
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