<prompt> Human: Hi all,Is it better to cash out your PTO or to use it when you resign from a company? Here is the situation: I live in the state of California My salary is 84,700 I currently have 28 unused PTO days I am unsure whether they will lump my PTO cash out into my final salary, so it may push my tax bracket up in my final pay. I am unsure whether they will provide a separate check or deposit from my regularly paid salary. Will this push my tax bracket up if this shows as 2 separate income for me? One for my regular pay and another that shows as a supplemental pay?I have read that if you get cashed out, you will get taxed more, and therefore, get paid less. But I have also read that in the end, you will receive the same amount of pay when you do your taxes in the next year.So, was wondering if someone can tell me which case of scenario is the best case? Or is it just all the same?  <response>: It sounds like you misunderstand how tax brackets work. Only income above the threshold is taxed at the higher tax bracket percentage. I have read that if you get cashed out, you will get taxed more, and therefore, get paid less. This is wrong.That being said, from a pure finance perspective, its best to wait as long as possible to use PTO, because then your PTO will be paid either as paid time off, or cashed out at your highest pay rate.Edit: Well, I suppose that last statement could use some qualifications. There are perhaps situations where, if you had the same pay rate, it would be best to cash some out in one year and some out the next. But Im just going to keep it simple and go with that. I wouldnt be trying to think too hard about it; its great you have so much PTO banked up. 