# How to Calculate Accrued Vacation Time in Excel (with Easy Steps)

In general, every company allows the employees to take a certain amount of leave days with pay, and that is called PTO or Paid Time Off. And if the employees don’t have the given leave days then he/ she can encash the leave and that is called Accrued vacation time. In this article, I will show you how to calculate the accrued vacation time in Excel. Here, I will use an Excel formula to calculate accrued vacation days based on the joining date. You can also download the free spreadsheet and modify it for your use.

## What Is Accrued Vacation Time?

Generally, employees get a certain amount of days to leave for vacation, personal reasons,s or sickness. But if the employee hasn’t used the earned leave days then this will be called Accrued Vacation Time. And the employee will earn the amount equivalent to the accrued vacation time at the end of the year. This is also called PTO – Paid Time Off.

## Steps to Calculate Accrued Vacation Time in Excel

To calculate accrued vacation time in Excel, you should have a ready database of Employees where you will get the date of joining, names, wages, etc. In addition, you should have the employee attendance tracker complete for that year so you can calculate the vacation days taken by the employee. Here, I am showing all the steps to calculate the accrued vacation time in Excel. ### Step 1: Create Paid Time Off (PTO) Structure

At first, you have to make a PTO structure for your company as per the years of service given by the employee. As the senior employees will get more leave days than the new joiners.

• So, create a table containing the permitted paid leave days for employees concerning their years of service.
• Create one more column that contains the lower of the group range for the years of service. This column will be used for the VLOOKUP formula. ### Step 2: Create Employee Database with Joining Dates

Then, you should have a ready database of employee data. Collect the data of employee names, joining dates, and wages. And, make a table with these data in an Excel worksheet. ### Step 3: Calculate Years of Service

Now, you have to calculate the years of service given by the employee. You can use the DATEDIF function to calculate the years from the joining date till today. For this, paste this link into cell D5:

`=DATEDIF(Database!D5,NOW(),"Y")`

Formula Explanation

• Start_date = Database!D5
This will give the joining date of the respective employee from the Database sheet.
• End_date = NOW()
To get the date of the working date, the NOW Function is used here.
• Unit = “Y”
It will give years between the two dates.  ### Step 4: Calculate Allowed Vacation Days

Now, to get the allowed leave days of employees concerning their joining date of them, you have to use the VLOOKUP function in Excel. So, paste this link into the cell E5:

`=VLOOKUP(D5,Database!\$G\$6:\$H\$9,2)`

Formula Explanation

• Lookup_value = D5
The function will look for the value in cell D5 in the lookup table
• Table_array = Database!\$G\$6:\$H\$9
This is the range of cells which is the lookup table where the function will search for the lookup value.
• Col_index_num = 2
It will return the value of column 2 in the lookup table from the row where the lookup value exists. ### Step 5: Insert the Number of Vacation Days Taken from Employees’ Attendance Tracker

Now, open the Employee attendance tracker of that year and link the cell containing the total leave days taken with this file in cell F5 or insert the values manually in the vacation taken column. ### Final Step: Calculate Accrued Vacation Time

Now, calculate the accrued vacation days with this formula:

Accrued Vacation Days = Allowed Vacation Days – Vacation Taken Now, you can calculate the accrual vacation payment to encash the leave days not taken. So, the formula will be:

Accrued Vacation Payment = Accrued Vacation Days x Daily Wages

###  Now, you have the accrued vacation days and the payments of the employees of your company. ## Conclusion  