Why is 'accrual per hour worked' so small?

It's meant to be multiplied by actual hours worked in payroll software, not read on its own. Over a full 2,080-hour year it adds back up to your full annual vacation hours.

Does this include holidays or sick leave?

No, this is vacation/PTO time only. Many employers track holidays and sick leave separately from vacation accrual.

Payroll

Vacation Accrual Calculator

Convert an annual vacation day entitlement into an accrual rate per pay period or per hour worked.

Inputs

Annual vacation days (days)

Hours per workday (hrs)

Pay frequency

Result

Accrual per pay period

4.62 hrs

Annual vacation hours120 hrs

Accrual per hour worked0.0577 hrs

How the calculation works

Vacation entitlement is usually quoted in days per year, but payroll systems accrue it in hours per pay period. Multiply your vacation days by your workday length to get annual vacation hours, then divide by how many pay periods you have in a year to get the per-period accrual rate. Accrual per hour worked assumes a standard full-time year of 2,080 hours (40 hrs/week × 52 weeks) and is what payroll systems use for accrue-as-you-work policies rather than lump-sum grants.

Formula

Annual Vacation Hours = Vacation Days × Hours per Workday. Accrual per Pay Period = Annual Vacation Hours ÷ Pay Periods per Year. Accrual per Hour Worked = Annual Vacation Hours ÷ 2,080.

Examples

15 days/year, 8 hr workday, biweekly pay
120 annual hours, 4.62 hrs/pay period, 0.058 hrs/hour worked
10 days/year, 8 hr workday, weekly pay
80 annual hours, 1.54 hrs/pay period, 0.038 hrs/hour worked