Is PTO payout taxed? PTO payout tax calculator.
Yes — see exactly how much your PTO payout is taxed: 22% federal withholding, your state rate, and FICA, with the exact net take-home for your state.
Enter your details
How are you paid?
Your full pay before taxes are taken out
Most full-time jobs are 40
How many PTO hours you have left. Check your latest pay stub.
This changes the legal advice below, not the dollar amount.
Enter your pay and unused PTO hours to download the report.
What you'll be paid
Payout before taxes
$0.00
Enter your pay and unused PTO hours to see what you'll get paid and how much goes to taxes.
Estimates only. Tax withholding may differ based on your full-year income, filing status, and deductions. Consult a tax professional for exact figures.
Disclaimer: Calculations are based on the 2026 IRS Supplemental Wage Rate (22% flat federal withholding) and current state labor department guidelines. Always consult an employment attorney for binding legal disputes.
Estimates only. PTO payout rights and tax withholding vary by state, employer policy, and individual circumstances. This is not legal, tax, or financial advice. Consult your state labor department or a qualified professional. See our methodology.
How much is PTO payout taxed?
PTO payouts are supplemental wages, so withholding works differently from a regular paycheck. Three deductions come out of your gross: a flat 22% federal rate (37% on any amount above $1M), your state supplemental rate, and 7.65% FICA (6.2% Social Security up to the wage base + 1.45% Medicare). What remains is your net.
Remember: the 22% is a withholding rate, not your final tax rate. Your payout is ordinary income, and any over-withholding is refunded when you file. For the formulas and sources, see the methodology; for state payout law, see your state's guide. To export a full gross-to-net PDF, use the PTO payout calculator.
How much is PTO taxed when cashed out?
Whether you cash out PTO while still employed or receive it at separation, the tax treatment is the same: it is a supplemental wage subject to the 22% flat federal withholding rate, your state supplemental rate, and 7.65% FICA. The PTO payout tax rate does not change based on whether you quit, were fired, or cashed out voluntarily. Enter your hours and salary above to see the exact net for your state.
Frequently asked questions
What is the tax rate on a PTO payout?
A PTO payout is a supplemental wage: employers withhold a flat 22% federal rate (37% above $1M), plus your state supplemental rate and 7.65% FICA (Social Security + Medicare). The 22% is a withholding rate, not your final tax rate.
Is PTO payout taxed at a higher rate?
No. The flat 22% withholding often looks higher than a normal paycheck, but your payout is ordinary income taxed at your normal marginal rate. Any over-withholding comes back as a refund when you file.
How do I calculate my PTO payout after taxes?
Multiply your accrued hours by your hourly rate for the gross, then subtract 22% federal, your state rate, and 7.65% FICA. Enter your numbers above to see the exact net for your state.
How much is PTO payout taxed in a no-income-tax state?
In states with no income tax (Texas, Florida, Washington, Nevada, and others), only 22% federal withholding and 7.65% FICA apply — there is no state tax line, so your net is higher.