How PTO Accrual Works (With Real Examples)
A plain-English guide to how paid time off accrues — per pay period, per hour worked, or as an annual lump sum — with worked examples and the math behind each method.
Paid time off "accrues" when employees earn it gradually instead of receiving a full year's worth all at once. If you've ever looked at a pay stub and seen a PTO balance tick up by a few hours every two weeks, that's accrual in action. This guide explains the three common ways PTO is calculated, with worked examples for each.
The three accrual methods
There are really only three models most small teams use, and the right one depends on how predictable your hours are.
- Annual lump sum — the full balance is granted at the start of the year.
- Per pay period — a fixed amount is added each time payroll runs.
- Per hour worked — PTO is earned in proportion to hours, which suits hourly and part-time staff.
Per pay-period accrual
This is the most common method for salaried employees. You take the annual allowance and divide it by the number of pay periods in a year.
| Pay frequency | Pay periods / year | Accrual for 15 days |
|---|---|---|
| Weekly | 52 | 0.29 days each week |
| Every two weeks | 26 | 0.58 days each period |
| Twice a month | 24 | 0.63 days each period |
| Monthly | 12 | 1.25 days each month |
So an employee on a 15-day annual policy paid every two weeks earns about 0.58 days of PTO each pay period. By mid-year they've banked roughly 7.5 days.
Quick tip
Tracking accrual in hours instead of days avoids rounding headaches. Multiply the per-period days by the length of a standard workday — for an 8-hour day, 0.58 days is 4.62 hours per period.
Per-hour accrual
For hourly teams, PTO is usually earned as a rate per hour worked. A common figure is 0.0385 hours of PTO per hour worked, which adds up to about two weeks a year for someone working full time.
The advantage is fairness: someone who works fewer hours earns proportionally less, and there's no awkward true-up at year end.
Lump-sum allowance
The simplest model: everyone receives their full balance on January 1 (or their work anniversary). It's easy to explain and employees love it, but it carries a small risk — someone could take all their time in January and leave in February. Many teams pair a lump sum with a short waiting period for new hires to manage that.
Which method should you choose?
If your team is salaried and stable, a lump-sum allowance is the friendliest. If you have turnover or hourly staff, accrual protects the business while still being fair. Whatever you choose, write it down clearly — ambiguity about how time is earned is one of the most common sources of PTO disputes.
You can model any of these in seconds with our free PTO accrual calculator, and when you're ready to stop doing this math by hand, SimplyPTO tracks every balance automatically.
Frequently asked questions
How much PTO is 1.25 days per month?
1.25 days per month works out to 15 days (three weeks) over a full year. It is one of the most common accrual rates for full-time employees.
Does PTO accrue while you're on PTO?
In most accrual setups, yes — paid time off is still paid time, so employees usually keep accruing while they're out. Unpaid leave is the common exception.
What is the difference between accrual and a lump-sum allowance?
With a lump-sum allowance, employees get their full yearly balance on day one of the year. With accrual, they earn it gradually across the year, which reduces the risk of someone taking more than they've earned and leaving.