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    Paid Time Off Accrual

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    What is paid time off accrual? Why is it needed and how is it calculated?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:12 pm ad1c9bdddf
    https://brainmass.com/business/cash-vs-accrual-accounting/paid-time-off-accrual-170582

    Solution Preview

    Paid Time Off or PTO is a bank of hours from which employees can draw. Employers credit additional hours to their employees "banks", usually every pay period. Most US employers offer their workers 10 paid holidays, 2 weeks' vacation, two personal days, and 8 sick leave days per year. Under a PTO plan, the employees would be credited with 30 days paid time off instead (10+10+2+8).

    On a bi-weekly pay schedule (26 pay periods per year) employees would accrue an additional 1.3 days of PTO every two weeks. Where a semi-monthly pay schedule is used (pay days on the 1st and 15th of each month) employees accrue 1.25 days PTO on each of the 24 ...

    Solution Summary

    This solution defines the concept of paid time off accrual and how it is calculated.

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