The rule in Idaho
The rule is set out in Idaho Department of Labor: Labor Laws FAQ.
- Final pay is due by the next regular payday or within 10 days (weekends and holidays excluded), whichever is earlier, or within 48 hours of a written request.
Use-it-or-lose-it. We found no Idaho statute or agency rule on use-it-or-lose-it policies, so the employer’s written policy usually decides.
What to check in your policy
Your handbook or offer letter decides. If it promises payout, that promise can usually be enforced. If it says unused time is forfeited, or says nothing, you may not be owed it. Keep a copy of the policy that was in force when you earned the time.
Tax on a Idaho payout
A payout is taxable wages. Take 80 unused hours at $25.00 an hour, worth $2,000.00. Paid on top of regular wages, it is a supplemental payment, so many employers withhold $440.00 of federal income tax at the flat 22% rate, plus $124.00 of Social Security and $29.00 of Medicare, leaving about $1,407.00.
Idaho income tax is withheld on top of that, under the state’s own rules, so you will receive somewhat less. Withholding is not the final tax; any difference is settled on your return.
Questions people ask
Does Idaho require employers to pay out unused PTO?
Not by law. Idaho law does not require vacation pay, so payout of unused vacation depends on your employer's policy or agreement.
Is use-it-or-lose-it vacation legal in Idaho?
Usually, if the written policy says so. We found no Idaho statute or agency rule on use-it-or-lose-it policies, so the employer’s written policy usually decides.
How is a PTO payout taxed in Idaho?
Federally, a payout on top of regular wages is a supplemental payment: many employers withhold 22% for income tax, plus Social Security and Medicare. Idaho income tax is withheld as well, under the state’s own rules.