{"id":151283,"date":"2023-05-03T07:53:57","date_gmt":"2023-05-03T07:53:57","guid":{"rendered":"https:\/\/www.aihr.com\/?post_type=hr-glossary&#038;p=151283"},"modified":"2025-03-13T13:47:42","modified_gmt":"2025-03-13T13:47:42","slug":"pto-accrual","status":"publish","type":"hr-glossary","link":"https:\/\/www.aihr.com\/hr-glossary\/pto-accrual\/","title":{"rendered":"PTO Accrual"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-is-pto-accrual\">What is PTO accrual?<\/h2>\n\n\n\n<p>PTO accrual refers to the process of earning <a href=\"https:\/\/www.aihr.com\/hr-glossary\/paid-time-off\/\">paid time off<\/a> (PTO) over time rather than receiving a set amount all at once. Employees accumulate PTO based on factors like hours worked, length of service, or a predetermined schedule set by their employer.<\/p>\n\n\n<div class=\"gaihrpl gaihrpl-29\"><div class=\"gaihrpl-single aaihrpl-147\"><a class=\"gofollow\" data-track=\"MTQ3LDI5LDYwMA==\" href=\"https:\/\/www.aihr.com\/courses\/compensation-benefits-certification\/?il_id=banner&#038;il_name=cbcp&#038;il_creative=cbcp-modules&#038;il_position=slot2\" target=\"_blank\" rel=\"nofollow\" style=\"display:block;padding-top:20px;\"><img decoding=\"async\" src=\"https:\/\/www.aihr.com\/wp-content\/plugs\/podcast-blog-ads-fade.jpg\" srcset=\"https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Modules.png 360w, https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Modules.png 360w, https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Modules.png 700w, https:\/\/www.aihr.com\/wp-content\/plugs\/ w\" sizes=\"(max-width: 480px) 360px, (max-width: 960px) 360px, (max-width: 1280px) 700px, 750px\" style=\"box-shadow: 0px 0px 20px 5px rgb(46 61 73 \/ 15%);display: block;margin: auto; border-radius:19px;\" class=\"small_ad\" \/><\/a>\r\n<br><\/div><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-pto-accrual-work\">How does PTO accrual work?<\/h2>\n\n\n\n<p>PTO accrual works by allowing employees to gradually earn paid time off based on their hours worked or tenure with the company. The specifics depend on the employer\u2019s policy, but here\u2019s how it typically functions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accrual rate<\/strong>: Employers set an accrual rate, which determines how much PTO an employee earns per pay period. This can be based on:\n<ul class=\"wp-block-list\">\n<li>Hours worked (e.g., earning 0.05 hours of PTO for every hour worked)<\/li>\n\n\n\n<li>Days per month (e.g., 1.25 days per month, totaling 15 days per year)<\/li>\n\n\n\n<li>Annual allocation divided by pay periods (e.g., if an employee gets 20 days per year and is paid biweekly, they accrue 0.77 days per pay period).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Tenure-based accrual<\/strong>: Some companies increase PTO accrual rates based on years of service. For example, employees with one to five years of tenure might earn 15 days per year, while those with six to 10 years of tenure might earn 20 days per year.<\/li>\n\n\n\n<li><strong>Accrual caps<\/strong>: Many employers place a cap on how much PTO an employee can accumulate. Once the cap is reached, additional accruals may stop until some PTO is used.<\/li>\n\n\n\n<li><strong>Rollover policies<\/strong>: Companies may allow unused <a href=\"https:\/\/www.aihr.com\/hr-glossary\/pto-rollover\/\">PTO to roll over<\/a> into the next year, limit the amount that rolls over, or have a &#8220;use-it-or-lose-it&#8221; policy where unused PTO expires.<\/li>\n\n\n\n<li><strong>Accrual tracking<\/strong>: Employers typically track PTO in payroll or HR systems, and employees can check their available balance through pay stubs, employee portals, or HR departments.<\/li>\n\n\n\n<li><strong>Accrual start date<\/strong>: Some employers allow PTO to start accruing from an employee\u2019s hire date, while others may require a probationary period before accrual begins.<\/li>\n<\/ul>\n\n\n\n<p>Overall, PTO accrual ensures employees earn their time off gradually rather than receiving a lump sum at the beginning of each calendar year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-pto-accrual\">How to calculate PTO accrual<\/h2>\n\n\n\n<p>Calculating PTO accrual depends on the accrual method used by the employer. Here\u2019s how you can do it:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-hourly-accrual-based-on-hours-worked\">1. Hourly accrual based on hours worked<\/h3>\n\n\n\n<p>If PTO is accrued per hour worked, use this formula:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td rowspan=\"2\"><strong>PTO&nbsp;accrued&nbsp;per&nbsp;hour<\/strong> =<\/td><td colspan=\"2\">Total PTO per year<\/td><\/tr><tr><td colspan=\"2\">Hours worked per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For example, if an employee works 40 hours per week (2,080 hours per year) and earns 80 hours of PTO annually:<\/p>\n\n\n\n<p class=\"has-text-align-center\">80 hours of total PTO per year \u00f7 2,080 hours worked per year = <strong>0.0385<\/strong>&nbsp;hours&nbsp;of&nbsp;PTO&nbsp;accrued per&nbsp;hour<\/p>\n\n\n\n<p>If the employee works 35 hours per week:<\/p>\n\n\n\n<p class=\"has-text-align-center\">35 hours worked per week \u00d7 0.0385 = <strong>1.35<\/strong>&nbsp;hours&nbsp;of PTO accrued&nbsp;per&nbsp;week<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-accrual-per-pay-period\">2. Accrual per pay period<\/h3>\n\n\n\n<p>If PTO accrues every pay period, use this formula:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td rowspan=\"2\"><strong>PTO&nbsp;accrued&nbsp;per&nbsp;pay&nbsp;period<\/strong> =<\/td><td colspan=\"2\">Total PTO per year<\/td><\/tr><tr><td colspan=\"2\">Number of pay periods per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For example, if an employee earns 120 hours of total PTO per year and is paid <a href=\"https:\/\/www.aihr.com\/hr-glossary\/biweekly-pay\/\">biweekly<\/a> (26 pay periods per year):<\/p>\n\n\n\n<p class=\"has-text-align-center\">120 hours of total PTO per year \u00f7 26 pay periods per year = <strong>4.62<\/strong>&nbsp;hours&nbsp;of&nbsp;PTO&nbsp;accrued per&nbsp;pay&nbsp;period<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-monthly-accrual\">3. Monthly accrual<\/h3>\n\n\n\n<p>If PTO accrues monthly, use this formula:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td rowspan=\"2\"><strong>PTO&nbsp;accrued&nbsp;per&nbsp;mont<\/strong>h =<\/td><td colspan=\"2\">Total PTO per year<\/td><\/tr><tr><td colspan=\"2\">Number of months per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For an employee with 15 days (120 hours) of total PTO per year:<\/p>\n\n\n\n<p class=\"has-text-align-center\">120 hours of total PTO per year \u00f7 12 months per year = <strong>10<\/strong>&nbsp;hours&nbsp;of&nbsp;PTO accrued&nbsp;per month<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-daily-accrual\">4. Daily accrual<\/h3>\n\n\n\n<p>If PTO accrues daily, use this formula:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td rowspan=\"2\"><strong>PTO&nbsp;accrued&nbsp;per&nbsp;day<\/strong> =<\/td><td colspan=\"2\">Total PTO per year<\/td><\/tr><tr><td colspan=\"2\">Number of workdays per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>If an employee gets 120 hours of total PTO per year and works 260 days per year:<\/p>\n\n\n\n<p class=\"has-text-align-center\">120 hours of total PTO per year \/ 260 workdays per year = <strong>0.46<\/strong>&nbsp;hours&nbsp;of&nbsp;PTO&nbsp;accrued per&nbsp;day<\/p>\n\n\n<div class=\"gutenberg-quote-columns one_column\">\n\t<div class=\"gutenberg-quote-column\">\n\t\t      \n\t\t     \t\t\t\t\t     <div class=\"gutenberg-quote-column-content\"><h3 data-start=\"0\" data-end=\"53\"><strong data-start=\"0\" data-end=\"51\">Streamline PTO accrual for a balanced workforce<\/strong><\/h3>\n<p data-start=\"55\" data-end=\"328\">Learn to manage PTO accrual effectively to ensure employees earn PTO fairly while maintaining operational efficiency.<\/p>\n<p data-start=\"330\" data-end=\"516\" data-is-last-node=\"\" data-is-only-node=\"\">AIHR\u2019s <a href=\"https:\/\/www.aihr.com\/courses\/compensation-benefits-certification\/?il_id=ctr&amp;il_name=box-and-link-in-article&amp;il_position=none\" target=\"_blank\" rel=\"noopener\">Compensation &amp; Benefits Certificate Program<\/a> will teach you how to design competitive PTO policies, optimize accrual structures, and balance employee wellbeing with business needs.<\/p>\n<div style=\"text-align: center;\">\n<div class=\"wp-block-button has-custom-font-size has-medium-font-size\"><a class=\"wp-block-button__link has-white-color has-text-color has-background has-link-color wp-element-button\" style=\"border-radius: 5px; background-color: #30206b; padding: 15px 30px; font-size: 18px;\" href=\"https:\/\/www.aihr.com\/courses\/compensation-benefits-certification\/?il_id=ctr&amp;il_name=box-and-button-in-article&amp;il_position=none\" target=\"_blank\" rel=\"noopener\">GET STARTED<\/a><\/div>\n<\/div>\n<\/div>\n              \n\t<\/div>\n\t \n<\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-good-pto-accrual-rate\">What is a good PTO accrual rate?<\/h2>\n\n\n\n<p>A good PTO accrual rate depends on company policy, industry norms, and <a href=\"https:\/\/www.aihr.com\/hr-glossary\/employee-tenure\/\">employee tenure<\/a>. However, a standard accrual rate for full-time employees in the U.S. is around four to six hours per pay period for a biweekly payroll, which translates to 10 to 15 days of PTO per year.<\/p>\n\n\n\n<p>Here\u2019s a general breakdown of common PTO accrual rates:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Two weeks (10 days) per year<\/strong> \u2192 3.08 hours per biweekly pay period<\/li>\n\n\n\n<li><strong>Three weeks (15 days) per year<\/strong> \u2192 4.62 hours per biweekly pay period<\/li>\n\n\n\n<li><strong>Four weeks (20 days) per year<\/strong> \u2192 6.15 hours per biweekly pay period<\/li>\n<\/ul>\n\n\n\n<p>Many companies also increase PTO accrual rates based on tenure. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Up to two years:<\/strong> 10 days per year<\/li>\n\n\n\n<li><strong>Three to five years:<\/strong> 15 days per year<\/li>\n\n\n\n<li><strong>More than five years:<\/strong> 20+ days per year<\/li>\n<\/ul>\n\n\n\n<p>If the company offers <a href=\"https:\/\/www.aihr.com\/blog\/unlimited-paid-time-off\/\">unlimited PTO<\/a>, accrual rates don\u2019t apply, but many businesses still track time off for operational planning.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-hr-best-practices-for-setting-a-pto-accrual-policy\">HR best practices for setting a PTO accrual policy<\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Clearly communicate PTO policies:<\/strong> Communicate PTO policies to your employees as part of your HR handbook, ensuring they&#8217;re all on the same page. Ensure procedures on how to request time off are well-documented and easily accessible, and clearly communicate potential limitations, such as staffing requirements.&nbsp;<\/li>\n\n\n\n<li><strong>Respond promptly to requests:<\/strong> Be sure to inform employees promptly if their request has been approved or denied. If approved, the organization should honor the request even amid extenuating circumstances. Employees may make travel arrangements or appointments on their days off, so rescinding PTO requests can be very costly for them. It an also damage the company&#8217;s relationship with them.<\/li>\n\n\n\n<li><strong>Destigmatize taking leave:<\/strong> Instead of maintaining separate balances for vacation and sick time, consider offering an all-encompassing annual balance for any time taken off. This can help reduce the stigma of calling in sick to the office if an employee needs to recover from an illness they&#8217;d rather not disclose.<\/li>\n\n\n\n<li><strong>Encourage employees to take time off:<\/strong> Avoid burnout and decreased productivity by encouraging employees to take time off when needed. A healthy working environment encourages a good work-life balance for employees.&nbsp;<\/li>\n<\/ol>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;69faa19055e18&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"69faa19055e18\" class=\"wp-block-image size-full wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"680\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.aihr.com\/wp-content\/uploads\/setting-pto-accrual-policies.png\" alt=\"Setting PTO Accrual Policies\" class=\"wp-image-151285\" srcset=\"https:\/\/www.aihr.com\/wp-content\/uploads\/setting-pto-accrual-policies.png 1024w, https:\/\/www.aihr.com\/wp-content\/uploads\/setting-pto-accrual-policies-300x199.png 300w, https:\/\/www.aihr.com\/wp-content\/uploads\/setting-pto-accrual-policies-768x510.png 768w, https:\/\/www.aihr.com\/wp-content\/uploads\/setting-pto-accrual-policies-510x339.png 510w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faq\">FAQ<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1740561515210\"><strong class=\"schema-faq-question\">Does PTO accrual reset every year?<\/strong> <p class=\"schema-faq-answer\">PTO accrual policies vary by employer. Some companies reset PTO annually, meaning unused hours expire at the end of each year (a &#8220;use it or lose it&#8221; policy). Others allow PTO to carry over to the next year, sometimes with limits. Some organizations offer PTO banks that roll over indefinitely or convert unused time to cash. You can check your company\u2019s policy for specifics.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1740561545497\"><strong class=\"schema-faq-question\">How much PTO do you accrue per pay period?<\/strong> <p class=\"schema-faq-answer\">PTO accrual per pay period depends on your employer\u2019s policy and work schedule. For a full-time employee with 15 days (120 hours) of PTO per year, the accrual rate would be:<br\/><strong>\u2022<\/strong> <strong>Biweekly pay (26 pay periods per year):<\/strong> 4.62 hours per period<br\/><strong>\u2022<\/strong> <strong>Semimonthly pay (24 pay periods per year):<\/strong> Five hours per period<br\/><strong>\u2022<\/strong> <strong>Monthly pay (12 pay periods per year):<\/strong> 10 hours per period<br\/>Your specific accrual rate may vary based on tenure, company policy, and whether PTO includes sick leave.<\/p> <\/div> <\/div>\n","protected":false},"parent":0,"menu_order":0,"template":"","hr_glossary_category":[575],"class_list":["post-151283","hr-glossary","type-hr-glossary","status-publish","hentry","hr_glossary_category-compensation-benefits","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is PTO Accrual? | AIHR - HR Glossary<\/title>\n<meta name=\"description\" content=\"Learn about PTO accrual and how to calculate paid time off balances. 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