Does PTO count toward overtime?
No, not under US federal law. Overtime is owed for hours worked over 40 in a workweek. Vacation, sick days, holidays and other paid time off are paid, but they are not hours worked, so they do not count toward the 40. The Department of Labor says the same about holidays: time off is not work time.
- 32 hours worked + 8 hours PTO = 40 paid hours, no overtime.
- 40 hours worked + 8 holiday hours = 48 paid hours, still no overtime. All 48 hours are paid at the regular rate.
- 44 hours worked + 8 PTO hours = 4 hours of overtime (the 4 worked hours over 40) plus 8 hours of PTO at the regular rate.
Some employers and many union contracts choose to count paid holidays toward overtime. That is allowed, it just is not required. Check your handbook or agreement.
How to add PTO to a time card
- Add up the hours you actually worked each day, after unpaid lunch.
- Work out overtime from the worked hours only (over 40 in the week, or the daily rule where you live).
- Add the PTO, sick and holiday hours as a separate line, paid at your regular rate.
- Total paid hours = worked hours + paid time off. Gross pay = regular pay + overtime pay + PTO pay.
Is paid time off required?
Federal law does not require paid vacation, paid holidays or paid sick days. Many states and cities do require paid sick leave, commonly earned at about 1 hour for every 30 or 40 hours worked, and some require paid leave for any reason. In Canada, vacation pay and public holiday pay are required by every province. See the Ontario holiday pay calculator.
Sources: US DOL: Holiday Pay · US Department of Labor: Overtime Pay
Questions
Does PTO count toward overtime?
Not under US federal law. Overtime is based on hours actually worked over 40 in a workweek. PTO, sick and holiday hours are paid at the regular rate but do not count toward the 40, unless your employer or union contract says they do.
Do holiday hours count toward 40 hours?
No. A paid holiday is not time worked, so 40 hours worked plus an 8-hour paid holiday is 48 paid hours with no overtime under federal law.
How do I calculate pay with PTO?
Add up the hours you worked and work out overtime from those alone. Then add PTO hours at your regular rate. Gross pay is regular pay plus overtime pay plus PTO pay.