Every US state plus Washington, D.C. in one table: whether accrued vacation must be paid out at separation, whether use-it-or-lose-it forfeiture is prohibited, and the key nuance per state.
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10 states treat accrued vacation as earned wages that must be paid out when employment ends, regardless of company policy (California and Colorado among them). Another 5 states require payout conditionally, typically unless the written policy or contract explicitly excludes it. In every other state, the written company policy decides: what it promises is enforceable, what it excludes is forfeited. The table summarizes the rule per state; for the math and a net estimate, the PTO payout calculator has a dedicated page per state.
| State | Payout rule | Use-it-or-lose-it prohibited | Note |
|---|---|---|---|
| Alabama | Depends on employer policy | No | No state statute requiring payout; payout depends on the employer's written policy. |
| Alaska | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
| Arizona | Depends on employer policy | No | Payout depends on employer policy. State uses the regular withholding method (no flat supplemental rate). |
| Arkansas | Depends on employer policy | No | Payout depends on employer policy. |
| California | Payout required | Yes | Accrued vacation is earned wages: payout is required and use-it-or-lose-it is prohibited. CA supplemental rate is 6.6% (10.23% for bonuses/stock options). |
| Colorado | Payout required | Yes | Accrued vacation must be paid out; forfeiture is prohibited. Regular withholding method. |
| Connecticut | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Delaware | Depends on employer policy | No | Payout depends on employer policy. No flat supplemental rate (state suggests ~5% for some payments). |
| District of Columbia | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Florida | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
| Georgia | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Hawaii | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Idaho | Depends on employer policy | No | Payout depends on employer policy. Supplemental withholding varies (no single flat rate). |
| Illinois | Payout required | No | Earned vacation must be paid out under the IL Wage Payment and Collection Act. Flat income tax; regular method for supplemental. |
| Indiana | Payout required | No | Accrued vacation generally treated as earned wages and paid out, subject to a clear written policy. Regular method. |
| Iowa | Depends on employer policy | No | Payout depends on employer policy. |
| Kansas | Depends on employer policy | No | Payout depends on employer policy. |
| Kentucky | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Louisiana | Payout required | No | Accrued vacation is considered wages and must be paid out. Regular method. |
| Maine | Payout required | No | Larger employers must pay out accrued vacation at separation (recent law). Confirm employer-size thresholds. |
| Maryland | Conditionally required | No | Must pay out unless the employer's written policy clearly states forfeiture and the employee had notice. Regular method. |
| Massachusetts | Payout required | No | Accrued vacation must be paid out at separation. Regular method. |
| Michigan | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Minnesota | Depends on employer policy | No | Payout depends on employer policy/agreement. |
| Mississippi | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Missouri | Depends on employer policy | No | Payout depends on employer policy. |
| Montana | Payout required | Yes | Accrued vacation must be paid out; use-it-or-lose-it is prohibited. |
| Nebraska | Payout required | Yes | Earned vacation must be paid out; forfeiture prohibited. |
| Nevada | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
| New Hampshire | Depends on employer policy | No | No state income tax on wages. Payout depends on employer policy. |
| New Jersey | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| New Mexico | Depends on employer policy | No | Payout depends on employer policy. |
| New York | Conditionally required | No | Must pay out accrued vacation unless a written forfeiture policy was communicated to employees. |
| North Carolina | Conditionally required | No | Must pay out unless a written policy clearly states forfeiture and was communicated in advance. |
| North Dakota | Payout required | No | Accrued vacation generally must be paid out (narrow employer exceptions apply). |
| Ohio | Depends on employer policy | No | Payout depends on employer policy. |
| Oklahoma | Depends on employer policy | No | Payout depends on employer policy. |
| Oregon | Depends on employer policy | No | Payout depends on employer policy/agreement. |
| Pennsylvania | Depends on employer policy | No | Payout depends on employer policy. Flat state income tax; regular method for supplemental. |
| Rhode Island | Conditionally required | No | Vacation pay may be due as wages after a qualifying period of employment. |
| South Carolina | Depends on employer policy | No | Payout depends on employer policy. No published flat supplemental rate. |
| South Dakota | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
| Tennessee | Depends on employer policy | No | No state income tax on wages. Payout depends on employer policy. |
| Texas | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
| Utah | Depends on employer policy | No | Payout depends on employer policy. Regular withholding method. |
| Vermont | Depends on employer policy | No | Payout depends on employer policy. Supplemental withholding is 30% of federal withholding (not modeled here). |
| Virginia | Depends on employer policy | No | Payout depends on employer policy. Optional flat 5.75% supplemental rate. |
| Washington | Depends on employer policy | No | No state income tax on wages. Payout depends on employer policy. |
| West Virginia | Conditionally required | No | Fringe benefits including vacation may be payable as wages under the written policy/agreement. |
| Wisconsin | Depends on employer policy | No | Payout depends on employer policy. Supplemental rate varies by salary band (not modeled here). |
| Wyoming | Depends on employer policy | No | No state income tax. Payout depends on employer policy. |
General information only, not legal or tax advice. State rules are summarized and change over time; confirm with employment counsel and your state labor agency before relying on them.
A policy under which unused vacation is forfeited at year end. Some states (California, for example) prohibit forfeiture because accrued vacation counts as earned wages there.
Usually not: payout rules generally apply to vacation/PTO. Accrued sick leave does not have to be paid out in most states unless the employer's policy says otherwise.
As of the last-updated date shown, as general information. Laws change; confirm with the state labor agency or employment counsel before acting on it.