Estimates assume the same hours every week. Your policy, state and local paid leave laws may set different rules for waiting periods, caps, carryover and payout. General information, not legal advice.
With accrual, employees earn paid time off gradually as they work instead of receiving the full amount on day one. Most US employers use one of three methods:
For help designing a policy, read our guide to PTO accrual policies.
| Policy | Calculation | Result |
|---|---|---|
| 80 hours per year, biweekly pay, 40 hours/week | 80 ÷ 26 pay periods; 80 ÷ 2,080 hours | 3.08 hours per paycheck, 0.0385 per hour worked |
| 1 hour per 30 worked, 30 hours/week | 30 × 52 = 1,560 hours ÷ 30 | 52 hours per year, 1 hour per week |
| 120 hours per year, semi-monthly pay | 120 ÷ 24 pay periods | 5 hours per paycheck |
There is no federal law requiring private employers to offer paid vacation or PTO, but many states and cities require paid sick leave. Several of these laws use an accrual rate of at least 1 hour for every 30 hours worked, for example California, New Jersey and Arizona, while others use different rates, caps and usage limits. If your PTO policy is meant to satisfy a sick leave law, make sure it accrues at least as fast as the law requires and follows its carryover and usage rules. Check your state and local labor department for current requirements.
An accrual cap stops employees from earning more PTO once their balance reaches a set limit, which keeps liabilities predictable without taking away time already earned. Carryover rules decide how much unused PTO rolls into the next year. Some states, such as California, do not allow use-it-or-lose-it policies for vacation, so a cap is the usual way to limit balances there.
EZTime records hours as employees clock in, manages time-off requests and approvals, and keeps balances visible to employees and managers. From $2 per employee per month.
Divide the annual PTO hours by the number of pay periods in a year. For 80 hours on a biweekly schedule, 80 ÷ 26 = about 3.08 hours per pay period.
Divide the annual PTO hours by the hours worked in a year. A full-time employee works about 2,080 hours a year, so 80 hours of PTO equals about 0.0385 hours of PTO per hour worked.
It depends on your policy and on state and local law. Paid sick leave laws often cover part-time employees, and an hours-worked accrual method gives part-time staff a fair, proportional amount.
An accrual cap is the maximum PTO balance an employee can hold. Once they reach it, they stop accruing until they use some time off.
Yes. Time and attendance software can calculate accrual from hours actually worked, apply caps, and show employees their balance when they request time off.
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