How to use the tiered pto accrual calculator
- Enter the hire date, the date and balance you are starting from, the next pay date and the pay schedule.
- Enter your accrual tiers: the year of service each tier starts and the hours earned per year. The first tier starts at year 0.
- Pick the date to project to, and in the advanced options set a balance cap, a carryover limit and planned time off.
- Read the balance on the final date, the tier changes and the balance at the end of each month.
Formula
Years of service on a pay date = completed years since the hire date
Tier = the last tier whose starting year is at most the years of service
Earned per pay date = tier hours per year / pay dates per year (52, 26, 24 or 12)
Balance = previous balance + earned - time off, in date order
With a cap: earned hours stop at the cap. With a carryover limit: on 1 January any balance above it is lost
On a day with both a pay date and time off, the hours are earned first. A 1 January carryover limit is applied before that day's pay date.
Three tiers over two years
Hired 15 March 2021 with tiers of 80 hours a year from year 0, 120 from year 3 and 160 from year 5. On 1 January 2026 the employee has 4 years of service, a balance of 40 hours and earns 120 / 26 = 4.6154 hours per biweekly pay date. They take 40 hours on 6 July 2026 and 16 hours on 24 December 2026.
The fifth anniversary is 15 March 2026, so the rate steps up to 160 hours a year on the pay date of 20 March 2026. Over the 52 pay dates to 31 December 2027 the employee earns 312.31 hours, takes 56 and finishes with 296.31 hours. With a cap of 100 hours the end balance is 100.00 and 196.31 hours go unearned. With a carryover limit of 80 hours, 56.31 hours are lost on 1 January 2027 and the end balance is 240.00.
How tiered accrual works
Many employers give more time off as service grows: a base rate for the first years, a higher rate after a few years, and so on. Each pay date the employee earns the tier's yearly amount divided by the number of pay dates in a year. The tier is chosen by the completed years of service on that pay date, so the higher rate starts on the first pay date on or after an anniversary that begins a tier.
Caps and carryover limits change what is kept. A cap stops accrual at a maximum balance until time off is taken, while a carryover limit removes the balance above a number at the start of a new year. The page reports what each rule costs so you can see the effect of a policy.
What the projection does not know
Policies vary a great deal: some start a new tier on the anniversary, some pro-rate the first and last periods, some accrue by hours worked, and some reset on a different date. The page applies the simple rules you enter. Use your employer's handbook for the real policy.
Related tools: the PTO accrual calculator for a single rate, the accrued PTO liability calculator for what a balance costs an employer, the vacation day planner, the PTO tracker template and the vacation payout calculator.
Assumptions and limits
- Pay dates follow the chosen schedule from the next pay date: every 7 or 14 days, the 15th and last day, or the last day of each month.
- Hours earned each pay date are the tier's yearly hours divided by the pay dates per year, with no proration.
- Tiers are chosen by completed years of service on the pay date.
- The projection runs up to 10 years and the monthly table shows the first 36 months.
Frequently asked questions
When does a new tier take effect?
On the first pay date on or after the anniversary that starts the tier, in this model. Some employers start it on the anniversary itself or on the first day of the next month, so adjust the tier start year if your policy differs.
What is the difference between a cap and a carryover limit?
A cap limits the balance at any time, so accrual stops when you reach it. A carryover limit only applies on one day of the year, when the balance above the limit is lost. A balance can grow past the carryover limit during the year.
Can the balance go negative?
Yes, if planned time off exceeds the hours earned. The statistics show the lowest balance and its date so you can spot it. Some employers allow a negative balance and others do not.
Does it handle part-time schedules?
Enter the hours per year that apply to your schedule in each tier. The page does not scale tiers for part-time status, so use the yearly hours your employer gives you.