PTO Carryover Rules - How PTO Transfers Between Years
Understand PTO carryover rules and policies. Learn about different carryover approaches, state laws that protect your time off, and strategies for managing unused PTO at year end.
What is PTO Carryover?
PTO carryover (or rollover) is the ability to transfer unused paid time off from one year to the next. Policies vary widely—some allow unlimited carryover, others cap it, and some have "use it or lose it" policies.
Common Carryover Policies
Full carryover: All unused PTO transfers to next year. Capped carryover: Limited amount carries over (e.g., up to 40 hours). Use-it-or-lose-it: Unused PTO expires at year end. Hybrid: Capped carryover with payout option for excess.
State Laws on Carryover
Some states restrict or prohibit use-it-or-lose-it policies. California, Montana, and Nebraska treat PTO as earned wages that cannot be forfeited. These states may require payout or unlimited carryover instead.
Managing Carryover
Track your balance throughout the year. Plan vacations to use PTO before expiration. Understand your company's deadline and caps. Consider the cash value vs. rest value. Know your state's protection laws.