Home Time & ExpenseAccruals & Time Off Business Math: How to Calculate PTO and Vacation Accrual

Business Math: How to Calculate PTO and Vacation Accrual

by Peggy Emch

Calculating PTO by hand is not a simple task. There are many rates to choose from and the calculations aren’t always intuitive. For this reason, most small business owners just end up using a yearly accrual rate. This method is easy. You just have to decide how many days employees should get per year and give it to them in a lump sum. However, if you’re a little more math savvy, you can calculate PTO with other accrual rates that may be a better fit for your business. I’ll explain the different rates and the calculations.

Also, Timesheets.com has a free tool for calculating time off that you can try.

Typical Accrual Rates

No matter which accrual rate you choose, your employees will get a certain number of hours to use per year. The accrual rates vary in the frequency at which employees earn their time.

PTO Calculations

Before you calculate PTO, you must decide how many hours you want your employee to accrue per year (based on a full-time schedule) – maybe it’s 40, 80, or some other number. In the sections below, we’ll figure out the number of time employees should earn at each pay period.


A yearly accrual rate is great for long-term employees or employees who have already put in a year of tenure. Calculations are pretty basic. When an employee takes time off, subtract it from the running total. At the beginning of the year or on the employee’s anniversary date, add their time to whatever is leftover from the previous year.

But many companies don’t want their employees to have to wait a full year to be able to take some vacation time and so they will use any of the following rates instead.

By Hours Worked

Accruing time by hours worked is a special accrual rate that does not guarantee a certain number of hours to accrue per year. This is a great rate for part-time employees who work variable schedules and it is also used to fulfill sick time requirements.

If you want their vacation time to reflect the actual time they put in at the company, then this is the rate for you. Part-time employees will get fewer hours than their full-time counterparts, and employees who work overtime would earn more.

The calculation

Decide how many hours you would want your employees to get each year if they worked a regular full-time schedule. For this example, we’ll say 80 hours or two weeks. Next, figure out how many hours your employees would work in a year if they worked full time. This would be 40 hours times 52 weeks, minus the time off (and any paid holidays). In this example, the employee would work 2000 hours per year.

To get our accrual multiplier, we’ll divide 80 (hours in two weeks of work) by 2000 (hours worked in the year) to obtain .04. So for every hour our employees work they should earn .04 hours of PTO.

If you are using our service to track accruals, you can set this number in the system. Then your employees will earn appropriate PTO automatically regardless of whether they work 50 hours a week or 30. For this accrual rate, it’s really nice to have a system do the work for you because this is a little more math-heavy than the other accrual rates.


A daily accrual rate is another good rate for part-time employees. But the caveat is that these part-timers must work full 8-hour shifts. This is not a great rate for employees who work part-time shifts.

The calculation

To figure an employee’s accrued time based on a daily rate, you will divide the number of hours to accrue per year by the number of working days in a year, so 5 days x 52 weeks.

For an employee working 40 hours a week, getting 80 hours of paid time off per year, you will divide 80 by the number of working days in the year. 80/260 gives you .307. Multiply .307 by the number of total days in your pay period to see PTO in each cycle.


If the employee worked 5 days in the pay period, you would multiply 5 x .307 = 1.535. So this employee would get 1.535 hours of paid time off in this pay period. If he worked the full year, it would add up to 80 hours.  If the employee just works 4 days a week then he would get 1.228 hours each pay period.

Monthly, Bi-Monthly, or Every Two Weeks

Besides once yearly, these rates are the most common and it’s not too hard to calculate either.

The calculation

Divide the number of PTO hours granted per year by 24 for twice monthly or by 26 for every two weeks.

So employees given two weeks of vacation per year will get 3.333 hours each bi-monthly paycheck.

This accrual rate will be a little easier to handle than the daily or hourly rate since employees will see the same amount on each paycheck. It’s also a little less confusing and easier to figure out an employee’s current PTO amount if records go missing.

Paying Out PTO When Employees Leave

Paying employees for time earned is never fun for owners who are trying to manage a budget. Employees leave the company at random times and PTO can accumulate over the years into large sums that, in some cases, must be paid for with the last check.

When paying employees, some locations allow you to pay for PTO at the rate at which an employee earned the time off, while others like California require the payout amount to be calculated based on the current rate of pay. This detail can make a large difference in the amount due. Check with your local HR source or labor board to determine if there’s a payout rate requirement before calculating your employee’s payout amount.

The easiest way to calculate a payout amount is to use our handy payout calculator located here.

The Easy Way to Calculate PTO

Let Timesheets.com do these calculations for you! No matter which method you choose, the software will do the calculations each period and you won’t have to keep separate records or worry about making costly mistakes.

Make it easy on yourself with Timesheets.com.

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Doreen July 12, 2013 - 8:41 am

Where does the 3 week vacation piece come into the equation?

My total hours 290.75 divided by 25 week look back = 11.63 average hours worked per week.

To Calculate By Hours Worked:

If using 40/week as calculation:

40 x 52 = 2080

11.63 x 52 = 604.76

604.76 ÷ 2080 = 0.2975 % of full-time hours/week

So for every hour I work I should earn 0.2.975 hours of vacation. Is this correct?

If using 37.50/week as calculation:

37.50 x 52 = 1950

11.63 x 52 = 604.76

604.76 ÷ 1950 = 0.3101 % of full-time hours/week

So for every hour I work I should earn 0.3101 hours of vacation. Is this correct?

Ntombi February 22, 2017 - 12:15 pm

My vacation leave in the pay slip is 11.364.so how many day or week should i take for leave.

Business Math Series: Calculating Vacation Time Based on Hours Worked | The Timesheets Employee Management Blog November 17, 2014 - 9:53 am

[…] date. But there are other ways to calculate accruals too. I’ve written a whole post about it here but today I am going to dedicate a whole post on the most complicated method: by hours […]

Jacalyn January 29, 2017 - 2:53 pm

If I work12 hrs.and I have4week’s vacation time what would that total ? Also is it right that the company changes your vacation time to PTO I’m sure they’re ripping my off that’s just what they do !

Kelly Betlejewski February 22, 2017 - 7:22 am

Looking for some assistance on explaining to our employees why we will be changing to PTO time off and that they will need to accrue time. I want to see this as a positive and not have them feel like some of these other comments “feeling ripped off” We need to protect our company as well. We have run into instances where and employee leaves right after their anniversary and received 2 weeks vacation that was not earned but they feel it was bc of years in. ahhh help me >

Peggy Emch February 22, 2017 - 10:27 am

Hi Kelly,

Unless time off is a benefit of employment (given as soon as hired in some larger corporations), time off is an earned benefit. There are several ways in which you can “pay out” those earnings. You can either give employees their time off at the end of an employee’s first year – the employee has put in a year’s worth of work, they now receive their time off benefit for that previous year. In this case, if they left immediately after receiving their benefit, it would be okay because they put the year in to earn it. Or they can receive their time off earnings at each pay period – getting their time off for the work done in the previous pay period. Either way, employees have to put in the time to get their time off so I don’t think it really matters which accrual rate a company uses as far as fairness goes. I have some more pros and cons of the different rates in last week’s blog post that you might be interested in. https://blog.timesheets.com/2017/02/which-vacation-accrual-rate-to-use/

Let me know if I can help further!

Fernando jacob August 23, 2017 - 9:15 pm

Hi Peggy,

I have a question for you: what is the organization’s expense for an employee that earns $50,000/year + vacation allowance of 2% or $ 2,000/year?

Here are my thoughts: Y01 – Wages – 50,000 + Vacation Accrual $2,000. Expense = $52,000
Y02 – Wages 48,000 ( the employee took the vacation allowance) + Accrual $2,000. Expense 50,000.

Here is where I am confused: The time off taken by the employee is being paid out of the accrual account (reducing it) and the time worked out of the wages account.

The employee accrued another $ 2,000 this current year (accrual includes the time off work), so the liability account is back to its balance of 2,000. However the expense for the organization is lower than the previous year. is that right? I feel I am missing something … would love to hear your feedback.



Peggy Emch August 28, 2017 - 2:01 pm

Hi Fernando,

I admit I’ve never seen a scenario like this before but here are my thoughts on what I see here. In the first year, your company paid $50k, not $52k because the employee didn’t actually take the time off in that first year – she only accrued it. The second year she was paid $50k again except that this time $48k came from the wages account and $2k from the accruals account. Each subsequent year it will be the same (unless she gets a raise).

Let me know if you think I’m missing something!

Anthony March 30, 2018 - 8:46 pm

Hi I Got Question I Work 20 Hours A Week Some Times Its 16 My Pay Check Be Like 354.00 Every 2 Weeks My Job Say I Could Get A PTO But I Got To Wait 2 Weeks To Be In Da System I’m A Part Time Worker I Work 20 Hours Or 16 Hours A Week Pay Check Be 354.00$ Every 2 Weeks How Many Hours I Could Take PTO Vacation 1 Day Every Week Or Every 2 Weeks I Need Answers

John real Doe February 7, 2018 - 1:18 am

Our company requires time off to be approved. In our case it is 1 mo ahead of time, *unless* they can make arrangements to get their shift covered ahead of time.

In your case, you can simply require advance notification, or offer to pay out PTO time. Our company switched from a paid holiday system, to PTO, and many employees similarly felt cheated as they lost 6 paid days

Tom Juan February 22, 2017 - 10:49 am

So I want to calculate the days vacation the have remaining.
Do I take the Vacation Owed $625.00 divide by their rate/hr $19 divide by their work hours 8hr shift equals 4.11. So about 4 days of vacation owed. Right?

Peggy Emch February 22, 2017 - 11:13 am

Hi Tom. If you know you owe your employee $625 for vacation but aren’t sure how many hours that is, then, yes, divide that by the hourly rate to get 32.89 hours. That’s .89 more than 4 days.

Tom Juan February 23, 2017 - 4:10 pm

Is there an easier method to this type of calculations?

Peggy Emch February 28, 2017 - 7:02 am

You could use an automated accruals system…

Paras May 9, 2017 - 8:48 am


Want to calculate hrs. if In Time is [10:00 PM] and Out time is [6:00 AM Next day]. I have tried =TIME(HOUR(), MINUTE(), SECOND()) – TIME(HOUR(), MINUTE(), SECOND()). but not works if the Duty hours going in two days. Please help if you can..?


Harolyn Jenkins February 22, 2017 - 3:46 pm

If my hire date was 12/15/2005 my pay rate is $21.50 what is my accrual rate.

Peggy Emch February 28, 2017 - 6:52 am

You’ll have to ask your employer.

Caro February 23, 2017 - 10:49 am

i have a question an employee from my company was hired on Nov 1, 2016, and left Feb10, 2017. His package includes 120 hours of vacation. How many hours he accrued until his last day.

based on the calculations he accrued 33.8hours is this wrong or right?

Peggy Emch February 28, 2017 - 7:00 am

What accrual rate were you using for him? If it’s monthly, then your number looks right.

Is Use-It-Or-Lose-It a Good Time Off Policy? – HR for Small Business February 28, 2017 - 6:35 am

[…] drafts a time off policy, they have several choices to make: How much time off to give each year, which accrual rate to use, whether to implement a probationary period, and whether to use an accruals cap. When deciding on […]

Dionne March 1, 2017 - 8:51 am

if I have 4 weeks vacation, what is my accrual per month?

Sue Nava March 27, 2017 - 7:10 pm

If I work 40+ hours a week and get paid weekly.

What are the calculation breakdown for weekly PTO?

Roy April 9, 2017 - 1:38 am


I accrue 1 and 1/3 days leave for every week i am on the job.

How can I calculate in excel without incurring rounding errors due to decimalised days (1.333 days per week on the job)

Peggy Emch April 10, 2017 - 11:29 am

Hi Roy,

I don’t really know anything about accruals tracking in excel. Timesheets.com offers automated accruals tracking though!

John Stivers April 20, 2017 - 7:33 am

Are vacation hours accrued during the year they will be paid or during the previous year? I have an employee who is leaving and she says her unused vacation pay was accrued the previous year and she should be paid for her full 4 weeks vacation rather than the one week she has accrued thus far this year.

Peggy Emch April 21, 2017 - 11:43 am

Hi John,

Time off policies vary from company to company so it’s a good idea to clearly define your policy and share it with your employees. That said, if employees accrue time throughout the year, then they will never hit their max accrued until December. Clearing out their time at the end of the year would never give them a chance to use it. If you are in California (and several other states) and you did not specifically inform employees that you have a use it or lose it policy, then, yes, you do owe your employee for that time. Here is a little more information on that. https://blog.timesheets.com/2017/02/is-use-it-or-lose-it-a-good-time-off-policy/

Doug Longfellow April 24, 2017 - 7:52 am


Our vacation policy is:

The amount of paid vacation time employees receives each year increases with the length of their employment as shown in the following schedule.

After completion of 1 year of employment ………………. 5 days/year

After completion of 2 years of employment ……………… 10 days/year

After completion of 10 years of employment …………….. 15 days/year

The length of eligible service is calculated based on a “benefit year”. This is the 12-month period that begins when the employee is hired.

Once employees enter an eligible employment classification, they begin to earn paid vacation time according to the schedule.

If I read our policy right an employee is not eligible for vacation until they reach there anniversary date. Because we have a use it or loose it vacation policy this causes issues for employees hired late in the year. For example if someone was hired December 15th they would have only 2 weeks to use their vacation. The same problem exist for employees that increase vacation leave eligibility due to tenure.

I don’t like accruing vacation on each pay check for reason you have previously stated.

Any suggestions?

Peggy Emch April 24, 2017 - 11:20 am

Hi Doug,

Does the policy require that employees lose it by December 31st or is it by the end of the anniversary date?

Susan November 16, 2017 - 8:29 am

My situation is similar to Doug’s, except my employees get 1 week after 1 year; 2 weeks after 3 years and 3 weeks after 6 years of employment. They must use their vacation by December 31.
For someone starting in May 2016, I would have allotted them
3 days to use between 5/17 and 12/17
5 days from 1/18 and 12/18;
7 days from 1/19 and 12/19
10 days from 1/20 and 12/20 and 10 days from 1/21 and 12/21
13 days from 1/22 and 12/22
15 days from 1/23 and 12/23
Does this make the proper adjustment for the employee’s start date?

Peggy Emch December 4, 2017 - 3:36 pm

Hi Susan. This is a complicated scenario. Rather than having a use-it-or-lose-it policy that expires for all employees on the last day of the year, why not either have it expire on the employee’s anniversary date? Or, if you use our service, setup a policy that allows employees to keep their accrued time but never accrue more than their total allowed.

As for your calculations, it doesn’t look quite right to me. If the employee starts in May 2016, then in May 2017 they should be earning 2 weeks. So on your second line “5 days from 1/18 and 12/18” this is going into the second year and so they should have more than just 5 days.

John Dearborn April 27, 2017 - 5:43 pm

Hi Peggy,
Say the employee turns in their two weeks notice on April 10. His/her last day is April 24.
The employer then tells the employee that he/she is getting no vacation time paid out for the month of April. Does this make sense or is it even legal??

Peggy Emch May 9, 2017 - 1:14 pm

I would talk to a lawyer about it. It’s a pretty specific question and probably depends on the employee handbook at the company. For example, if an employee accrues time monthly for the previous month then no time for April would have yet accrued. A lawyer would know this for sure.

Shirley wong May 9, 2017 - 7:00 pm

I was hired back in Aug 2010. I earned my vacation on my anniversary month, which is 4 days/yr for the first 3 years and then 8 days/ year there after. The old manager quit and the new manager came aboard and wants to change our accrued hours from anniversary month to a calendar year. I got my 8 days vacation days up til August 2016. Then, my hours was cut in Jan 2017 and my vacation also got cut to only 3 days/year. My question is: I never got compensated for the accrued hours from August to dec 2016. When I asked my manager, she told me that since I earned my 8 days in 2016 already, it doesn’t matter anymore and I am maxed out, is that true?

shaamata May 10, 2017 - 9:25 am

I have 170.57 sick time and 151.82 annual time. How do I calculate how many days i actually have for sick leave or vaction time? how did you get that answer

Peggy Emch May 11, 2017 - 11:34 am

Assuming that you mean you have 170.57 hours of sick time, then just divide that by 8 (hours in a day) to get 21.32 days.

Matt May 10, 2017 - 4:28 pm

Hello, is it common to not earn the time off if you use your PTO that week? Such as, if you use any of your time, you will not recieve the full 1.54hrs that you would have earned if you worked the full week.

Peggy Emch May 11, 2017 - 11:36 am

Yes, if you are accruing time based on hours worked, then you would not accrue it while you’re not working, i.e. on vacation.

Debbie May 18, 2017 - 8:08 am

I accrue 3.07 hrs per week towards PTO, how many hours/weeks does that come out to? How did you get that number?

Deborah Jennings June 13, 2017 - 8:20 am

I believe you would do 3.07 X 52 weeks = 159.64 divided by 8 hours = 19.96 days. That would be for a full year. The 3.07 is earned per full 40 hour work week. That means if you take a day off in that time you will accrue less.

Donald Wright May 25, 2017 - 8:09 am

I am part time for 12 years and my company has been taking my accrual rate and multiplying it by my 25 hours per week. (My annual accrual hours for time off is 126). If I only happened to work 23 or 24 it would get multiplied by that. This year all of a sudden my numbers aren’t matching theirs and I found they are deducting all holidays and any paid time off (vacation/sick) and then multiplying the accrual rate. So If I took 3 vacation days they are multiplying the accrual rate x 10 instead of 25. Can they all of a sudden start doing this? Because now it seems I won’t accrue my 126 hours. (Before this accrual mess I would receive annually 4 weeks vacation and 5 sick days) I feel like I’m being jipped.

Peggy Emch May 26, 2017 - 8:48 am

Hi Donald,

As I understand it, what they are doing seems fair. Time off hours are never used in accruals calculations. If they were doing this before, it was probably a mistake. What is the multiplier that they are using? As long as the multiplier is based on your yearly hours worked, minus the hours you take off, then all should be correct.

Shawn May 29, 2017 - 9:18 am

For all salary employees I calculate a daily rate = (salary/260 paid days)**includes paid stat days

I then calculate vacation earned by calculating the amount of time they have been with the company. So for example if they started on January 1 and left the company on June 30, we would pay them out approx. half of their vacation benefit. For an employee entitled to 4 weeks vacation, they would have earned approx. 9.89 days.

Payout = daily rate*days earned

What do you think of this? Just want to make sure I haven’t missed any considerations

Tracy Johnson May 30, 2017 - 8:30 am

do you know the law if the company gives you 4 weeks at the beginning of the year and you have until the end to use it. Am I entitled to what is not used?

Peggy Emch May 31, 2017 - 7:03 am
Jessica June 13, 2017 - 7:43 pm

Im starting a new job and this is what she emailed me regarding the policy. Can someone help me out on how to calculate.

Our employees receive 5 sick days in January. New hires are prorated based on their hire date. I have provided a copy of our vacation policy below. Please let me know if you have any questions.
Years of Service Annual Accrual Per Pay Period
Up to 2 years 40 hours 1.54
Year 3 – 4 80 hours 3.07
Year 5 – 9 120 hours 4.62
Year 10+ 160 hours 6.15
Time off may be used only in one hour increments, unless otherwise required by law.
Eligible employees are allowed to carry 40 hours (5 days) of accrued time off into the next calendar year, unless applicable state law requires otherwise, in which case the Company will follow applicable state law.

Aisha Cole July 18, 2017 - 9:41 am

I am trying to figure out what an emplpoyee accrues in vacation time if they accrue 20 days per calendar year at a rate of 1.66 days per month after hire. What does 1.66 days equal as far as hours if the employee is paid every 2 weeks and the time is reflected on each pay check and there are 26 paydays in a year. Please help.

Peggy Emch July 18, 2017 - 1:29 pm

Hi Aisha.

In order to get your multiplier of 1.66 you just divide 20 days by 12 months. 20/12 = 1.66
Do a similar operation to get the multiplier for a biweekly calculation. 20/26 = .769

So employees will get .769 hours of time off on each paycheck. By the end of the year, they will have their 20 days.

Joann July 20, 2017 - 3:39 pm

Good afternoon, I have a question on Salary employees. I have two guys who work 7.5 days or 8 days if 31 days in a month. They work only twice a month. I’m wondering can you divide their accrual rate in half for the both employee’s? One employee works 15 days out of the month and the other does same. After three years their rate is 1.75

Msanchez August 17, 2017 - 2:49 pm

Help! I was hired 9/21/2009 and my last day is august 17, 2017. How much vacation time and sick have i accrued ?

Every year i get 120 vacation and 40 sick.

i also have 66.5 unused vacation.

Shafi Chou August 21, 2017 - 4:16 pm

Hi I have 3 weeks of vacation ( 5 days) per year and I just started the job in April 1st 2017. By the end of December, how many vacation days should I be able to take? This company also does not allow us to use the days into next year. We have to use it in the current year or we lose it. please advise if I use any of my accumulated vaca days, do I lose anything for 2018?

Peggy Emch August 28, 2017 - 2:12 pm

You should talk with your human resources department or your boss about that. It can depend on factors specific to your company.

Dolly Baxindine September 5, 2017 - 11:53 pm

I work 85 hours every two weeks (10 work days). I’m confused with trying to find how much vacation time I should have each year? Can you help?

Peggy Emch September 6, 2017 - 12:51 pm

It depends on what your company offers. Company policies vary.

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Lo September 30, 2017 - 10:27 am

Hi, I’m trying to apply the monthly pro-rated formula to get my accrual rate so I can project how much I will earn by a certain date, but I’m not sure if I understand how it was worded.

“Daily or Monthly: To figure an employee’s accrued time based on a daily or monthly rate, you will divide the number of hours to accrue per year by the number of working days in a year, so 5 days x 52 weeks, for daily or simply by 12 for monthly.”

So from what I understood using a monthly rate, I tried 80hrs vacation per year divided by 12 = 6.67. I know I’m not earning 6 hours per hour worked..Is there another step?

Cheryl October 20, 2017 - 7:41 am

I have an employee that was hired on 5/15/17. If he was hired 1/1/17, he would get 12 hours of personal time to use for the year. Since he was hired mid-year, I need to know how to prorate this amount. He is an hourly employee and works 40 hrs. per week and is paid weekly. How many hours of prorated personal time would he have to use before the year is over?

Peggy Emch October 20, 2017 - 10:44 am

Hi Cheryl,

Which accrual rate do you use for him – monthly, yearly? Also, did you mean that he gets 12 hours of personal time to use in a year, or did you mean days? Feel free to give me more details but assuming you meant days and assuming it’s a once yearly accrual rate, then he’s getting one day per month to use. He didn’t work for you for the first 4 and a half months so subtract that out to get 7.5 days.

Cheryl October 20, 2017 - 12:42 pm

I would use the yearly accrual rate and I meant 12 Hours.

Peggy Emch October 20, 2017 - 2:41 pm

Ok, so 7.5 hours for the year then.

Karin loera November 30, 2018 - 2:32 pm

Hi Peggy,
My question to you is I have some employees who work 6 days a week and work only 7 hours per day. So each week they are getting 2 hours of OT. Our company’s contract states after 1 year they get 1 week of vacation pay. My question is do I give them 40 hours a week? Or do I give them 42 hours a week due to because they do work OT?

Thank you in advance!!!

timesheets_blog December 4, 2018 - 4:36 am

Hi Karin,

Your policy can be whatever you want it to be since offering vacation is not the law, so offering only 40 hours of vacation is fine. It would be a better policy, though, if your employees thought it were fair. They would have a hard time taking a week off if, when they do, they’ll lose two hours of pay. I would go with 42 hours of time off for these employees.

Sharon Ray November 21, 2017 - 3:36 pm

Hello Peggy,
We’re really struggling on how to apply vacation hours. We are a very small agricultural company (grape growers). We give 50 hours vacation per year for full time employees working 50 hours/week. Some of our employees only work for 9 or 10 months of the year but we have some that come back year after year. How would I create a calculation for them to earn their vacation hours based on hours worked?
Many thanks for your help!

Peggy Emch December 4, 2017 - 3:55 pm

Hi Sharon,

To get your accrual multiplier, we’ll assume your employees work a regular full time schedule and get 50 hours vacation. The calculation would be 50/2030=.0246. If an employee worked 10 months with this multiplier, they would get about 50 hours off. Let me know if this helps. Using the hours worked rate usually won’t yield the exact number of hours off.

To check this, imagine your employee works for 9 months at 50 hours a week, with one week off. That will be

Sharon Ray November 27, 2017 - 2:12 pm

Hi Peggy,
I just approached my boss with your great accrual formula for seasonal employees but I am now thoroughly confused!
He wants them to start accruing after 1560 hours worked. They should accrue up 50 hours per year. I don’t know how to figure this out – I’d really appreciate your help.

Tammy December 29, 2017 - 11:35 am

I get the process of converting all employees at the same time from anniversary date to calendar date and awarding appropriate vacation time, but how do you prorate or transition a new employee into the system? If an employee starts on 9/27/17 and the PTO policy starts earning day 1 and is earned per hour worked, PTO awarded as follows: 0-1 year 32 hours .01626, 1 year 40 hours .02040, 2 years 48 hours .02459. This was calculated on 2080-112= 1968 hours worked. I need to transition the new employee in and have them on a 1/1/18 date. How do I prorate this?

Jennifer January 2, 2018 - 3:42 pm

I don’t see anything on my situation. In May 2017 I was told my hours were being cut and I would be part-time as of 8/1/17. My vacation hours for 2017 (10days) were earned in 2016.

In 2017 My vacation hours increased to 15 days @ 37.5 hours/week so these would be put toward 2018. If I calculate for 7 months (Jan 1-7.31) using the bi-monthly formula—- I get 4.69 hours earned per period. So for 7 months I have earned 65.66 hours PTO.

How do I calculate the part time hours from 8/1-12/31? I have worked 373 hours. I’m confused.

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[…] drafts a time off policy, they have several choices to make: How much time off to give each year, which accrual rate to use, whether to implement a probationary period, and whether to use an accruals cap. When deciding on […]

Karen June 29, 2018 - 12:37 pm

I need to prorate an employee’s vacation time for unpaid leave of 7 weeks time off. Vacation time is 10 days / 80 hours annually. How would I calculate this? What would the correct amount of vacation time be with the adjustment with the 7 weeks of unpaid time off when vacation time is not accrued?

Lynn November 13, 2018 - 10:31 am

I use excel for tracking vacation accruals – what formula would I use when an employee bumps up to the next accrual tier mid-way through the year? For example, John accrues .385 Jan – Mar but his 5 year anniversary is at the end of March so he begins to earn .577. How do I combine the two accrual rates within the same year?

nomina banbajio November 20, 2018 - 9:03 am

Getting a break from work is, ironically, something that many people work very hard for. Today, vacations are more valuable than ever. The only thing you can not get is more life time on this planet, so if you are not satisfied with the amount of vacations you currently accumulate, use aggressive strategies to get more.

Hammed balogun January 11, 2019 - 1:30 pm

I started working with an establishment in March. According to the job handbook, I am entitled to 40hrs paid vacation after 90days of probation. I applied for my paid vacation in December but I was paid for 30hrs. I was told the reason is because I haven’t spent up to a year working with the company. Is that right? Please enlighten me. Thanks

Sandy January 17, 2019 - 11:37 am

My question is how do I go from an annual renewal of vacation and sick time to a PTO system once the new year starts

Jean January 21, 2019 - 9:41 pm

When I was hired I signed a welcome letter stating after a 90 day probation period I was emigre for 2 sick days and 3 vacation days. After 1 year of employment I am entitled to 3 additional days. I was not given any policy so I assumed it went from Anniversary date to Anniversary but they do it by calendar year. So if I was hired May 2009, I didn’t use any vacation time till 2010 . If I give notice this month, Jan 2019, am I entitled to my 6 vacation days upon leaving? I assume the days were earned by working the previous year.

Kathleen Lundy May 28, 2019 - 10:57 am

I am looking into a new job and the Union contract says during the first year I would accrue 5/6 vacation days per month…what does that mean? Also do I have to join the Union after the Supreme Court decision?

Lindsay Sommers June 3, 2019 - 12:05 pm

Hi, I won’t be able to answer your question about joining the Union, however, I can help you with accruals. When you “accrue” hours, it basically means that you are going to gain time off hours at a certain rate. For instance, let’s say that I will accrue 10 hours of time off every month. I am going to end up with 120 hours of PTO in the year. There are 12 months in a year and I gain 10 hours each month, therefore 10 hours X 12 months = 120 hours of time off. Your new job says that you are going to get 5/6 vacation days each month, but I’m not sure how many hours they count as a “day”. Is a day 8 hours? is a day 4 hours? You will want to discuss the details with your new employer to see how many hours you will actually obtain each month or year.

Michael August 28, 2019 - 10:45 am

How would be PTO time be taxed

Efrain Garcia September 26, 2019 - 7:17 am

Hi, when my vacation rate should change, on the policy shows: years of service:. From 0-2 one week. From. 3-4 Two weeks. From. 5-9. Three weeks. From 10+. Four weeks. So the rate should change at the 2 year anniversary, and the 4 year anniversary and 9 year anniversary? Thank you

Lindsay Sommers October 3, 2019 - 2:45 pm

This certainly depends on your company’s accrual policy. In some cases, employers want their employees to actually finish the year before giving them hours. For example, let’s say that you just hit year 3 mark at your job. You think that you’re supposed to get 2 weeks of vacation time now that you’ve hit 3 years, but in reality you may have to finish the third year before getting your 2 weeks of paid time off. You will definitely want to clarify your company’s policy with your supervisor to ensure that you understand how your system works.

Efrain Garcia September 26, 2019 - 6:56 pm

Hi Peggy, my question is about when the rate change.
the policy shows:
Years of service:
0-2 40 Hrs per year at a rate of .76
3-4 80 Hrs per year at a rate of 1.54
5-9 120 Hrs per year at a rate of 2.3
10+ 160 hrs per year at a rate of 3.06

So, at the 2 year aniversary the rate will change from .76 to 1.54
and at the 4 year aniversary the rate will change from 1.54 to 2.3
then at the 9 year aniversary te rate will change from 2.3 to 3.06
please tell me if I’m wrong.
Thank you

Lindsay Sommers October 3, 2019 - 2:59 pm

You will definitely want to clear this up with your supervisor or HR department. They are the only people who will be able to clearly explain what your policy is and what is to be expected.

KATIE October 4, 2019 - 4:40 pm

Hi My comp policy is as follows, i just came up on my 7 years anniversary does this mean i get 9 days PTO as of that date or do I need to wait ? And if I need to wait when will that be ?
After first year Employees will earn PTO according to the following schedule:
After 1 year(s) of service employees will be earning 6 days PTO days per year. 0.0231
After 3 years(s) of service employees will be earning 7 days PTO days per year 0.0269
After 5 years(s) of service employees will be earning 9 days PTO days per year 0.0346
After 8 years(s) of service employees will be earning 10 days PTO days per year 0.0385
After 10 years(s) of service employees will be earning 15 days PTO days per year 0.0577

Lindsay Sommers October 7, 2019 - 4:08 pm

Based on what I see, it looks like you should have gotten 9 days of PTO after 5 years of service. If you’re on year 7, that means you should still get 9 days. If I were you, I would clarify this with your HR department or supervisor.

kim October 29, 2019 - 5:36 am

I work for a contracting company for the government that runs from Oct 1- Sept 30. The new contract company has stated that I receive 10 days (80 hours) of vacation time and 40 hours of sick time. They are now stating that I am on probation for 90 days and do no accumulate any time off and that nothing roles over past 30 Sept. I get paid based on hours worked but can not work over 40 and get paid 2 times per month with the first pay period being 31 October. being that it ends 30 sept and I will be paid 15 Oct for that pay period. Would this not decrease pay periods to accrue and use to 22 (one for Oct 2019 and one or Sept 2020 with 2 the remaining months)– if I am thinking this out should I not accumulate at 3.65 to make the 80 hours of leave before 30 Sept? (with accumulating during the probation)

The company “website” has me not accumulating anything until 01 Jan (after the 90 day probation) and only at 1.67 until 30 Sept that is only 28 hours- correct?

Lindsay Sommers November 10, 2019 - 9:17 pm

How are you getting your hours? Are you getting time off based on the hours you worked, each month, or are you getting your hours at the beginning of the year? You’re going to be on a probation period, so you shouldn’t expect to get any hours during that time. If you start on Oct 1st, Jan 1st would be your time off “start date”. From what you stated, your hours are capped after September 30th, which means that you’ll be capped at 80 hours of vacation time and 40 hours of sick time by the time Sep 30th rolls around. Your pay periods should not matter, you should get your vacation time and sick time normally based on your accrual rate and you should be guaranteed those hours if you work 2080 hours per year. Unfortunately since I can’t see your time off policy, I ca’t unlock this for you. I would suggest that you speak with your HR representative about this so they can clear up any confusion.

Noneyaaa January 7, 2020 - 8:14 am

Hello — Paid 2x per month, normally on the 10th and 25th. Pay periods are the 1-15, and 16-last day of the month. PTO is calculated per every 40 hours worked, per week, per pay period. From the 91st day worked through their 1st anniversary date they will accrue .5 hours, and one the 1 year anniversary it will bump up to 1.25.
Non-worked holidays are not included in calculating PTO.

How can I input this?

Lindsay Sommers January 9, 2020 - 12:27 pm

Hi there, I seem to be a bit confused by your question. You asked “How can I input this?”– Can you input what where? Are you trying to find a time tracking system to properly calculate accruals? Or are you asking how to calculate your accrual rate?

Noneyaaa January 9, 2020 - 1:50 pm

I apologize for the confusion. I was asking how to use this program to enter these metrics. OR any program..
thank you!!

Lindsay Sommers January 13, 2020 - 9:36 am

Thanks for the clarification! To start, our program only allows you to enter 1 PTO rate, 1 sick rate, and 1 vacation rate at a time– so you would have to change the employee’s PTO accrual rate after their first anniversary from 0.5 hours weekly to 1.25 hours weekly because our system has no way of knowing when the employee’s PTO rate needs to be updated to a higher number. To calculate your employee’s PTO annual totals, you will do this: From 91 days to 365 days, 52 weeks X 0.5= 26 hours annually. 1 year and forward, 1.25 x 52 weeks= 65 hours annually. You said that you don’t include certain holidays when calculating their accruals, so you would have to subtract their non-worked holidays from 52 weeks. For example, if your employees get 5 days of holiday time, you would multiply your total annual calculation by 51 weeks instead of 52 weeks. That would look like this 0.5 X 51 weeks= 25.5 hours annually and 1.25 X 51= 63.75 annually. If you have a Timesheets.com account, you would enter this in the employee’s settings within the “options” tab. In section 5, you would choose the “weekly” PTO accrual rate, enter the amount of hours the employee currently has in their PTO bank, enter the annual amount (the calculation I mentioned above), and then a cap for their PTO hours (if you have one). If you have any questions, you can always call our support team so they can help you enter this into your account. Their number is (800) 770-4959.

Thelma Dlabane February 13, 2020 - 12:40 pm

My vacation days is 19 calculate for me was working 40 hrs a day on service of 9years

Lindsay Sommers February 14, 2020 - 4:25 pm

In order to assist you with your accruals, I would need more information in regards to how often you get your time off (daily, by hour, monthly, weekly etc.).

Caroline Hammer March 22, 2020 - 5:51 pm

hello I have a question.
If I used 42 hours of sick pay and my hourly rate is $15 how much money do I get?

Lindsay Sommers March 25, 2020 - 4:06 pm

In most cases, sick time is paid at the same rate of your normal pay. Additionally, you don’t get overtime for any time off used during the pay period; overtime only counts for hours that you actually work. That being said, $15.00 x 42 is $630.00 without taxes.

Caroline April 30, 2020 - 9:57 am

How would you interpret the following policy

0 to 3 years accrual rate .01923 40 Hours
4th year forward accrual rate .03946 80 Hours

Employee start date 03-21-17
When would employee upgrade to 80 hours accural?

Lindsay Sommers May 1, 2020 - 6:22 pm

That would depend on the company’s policy. If you accrue 80 hours after you’ve completed 4 years, the date of the accrual would be 3/21/2021. However, if the 80-hour accrual rate starts at the beginning of the 4th year, the 80 hour accrual would start on 3/21/20.

timesheets_blog August 4, 2020 - 10:18 am

This conversation has been very popular, so we moved it to the Kingmaker Society. To join the discussion, please visit this page:
Business Math: How to Calculate PTO and Vacation Accrual

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