Unused paid time off does not disappear. It accumulates on the balance sheet as a liability that grows every time salaries rise, and it has been growing quickly. PTO usage has fallen roughly 20 percent since 2020, and accrued vacation balances across U.S. companies now exceed $1 trillion, close to $7,600 per full time worker.
This paper breaks down where that number comes from, what employers are required to record under FASB ASC 710, and why the operational cost of unused PTO is often larger than the accounting one.
What is inside
- Why PTO accounts for nearly 24 percent of total compensation costs, and why it behaves differently from healthcare or retirement contributions
- The accrual rules behind the liability, and the 20 states that require payout at separation
- What Harvard Business Review and the U.S. Travel Association found about the employees who actually use their time off
- Four practical ways finance and HR leaders are turning the liability into a retention advantage
PDF, 5 pages. No form required.