Paid Time Off (PTO) — Definition and What It Means for Your Income
Compensated leave from work, representing a significant but often overlooked component of total compensation.
Paid time off (PTO) includes vacation days, sick leave, and holidays for which an employee receives pay without working. The average U.S. worker receives approximately 10 days of PTO, representing about 3.8% of annual salary in value.
Why it matters
Self-employed and gig workers have no paid leave — every day not worked is a day without income, an often-overlooked cost when comparing self-employment to traditional employment.
Example
For a $60,000 salary, 10 days of PTO represents approximately $2,300 in value (3.8% of salary) that a gig worker doing equivalent work would not receive — they would simply earn $0 for that time.
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Paid Time Off (PTO) — FAQ
How much is PTO worth in dollar terms?
For the average 10 days of PTO, the value is approximately 3.8% of annual salary — on a $60,000 salary, that's roughly $2,300/year in compensation that gig workers don't receive.