Quick Answer
Comp time (compensatory time) is paid time off earned instead of overtime pay, typically at 1.5 hours for each overtime hour worked. On your pay stub, it appears as 'Comp Time Earned' or 'CTO Accrued' in hours, with a separate balance showing your total available comp time of up to 240 hours for most employees.
Best Answer
Sarah Chen, Payroll Tax Analyst
Best for employees who occasionally work overtime and want to understand comp time basics
What is compensatory time (comp time)?
Compensatory time, or "comp time," is paid time off that employees earn instead of receiving overtime pay. Under the Fair Labor Standards Act (FLSA), private sector employees must receive overtime pay, but government employees can receive comp time at their employer's discretion.
The basic formula: For every hour of overtime worked, you earn 1.5 hours of comp time. If you work 4 hours of overtime, you earn 6 hours of comp time.
How comp time appears on your pay stub
Your pay stub will typically show comp time in several ways:
Example: Understanding your comp time calculation
Let's say you're a government employee earning $25/hour with a 40-hour work week:
Week 1: You work 44 hours (4 hours overtime)
Week 2: You take a comp time day off (8 hours)
Key comp time rules and limitations
Reading your pay stub: Common comp time entries
What you should do
1. Track your balance: Monitor your comp time balance to avoid hitting the 240-hour cap
2. Understand the policy: Check your employee handbook for specific rules about earning, using, and losing comp time
3. Plan usage: Use comp time strategically since you're paid at your current rate, not the rate when earned
4. Upload your pay stub to our paystub-explainer tool to get a detailed breakdown of all your pay stub entries
Key takeaway: Comp time appears as hours earned, used, and banked on your pay stub, with most employees capped at 240 hours total.
*Sources: [Fair Labor Standards Act](https://www.dol.gov/agencies/whd/flsa), [Department of Labor Fact Sheet #7](https://www.dol.gov/agencies/whd/fact-sheets/7-flsa-public-sector)*
Key Takeaway: Comp time shows as hours on your pay stub with a 1.5-to-1 earning ratio and 240-hour maximum balance for most employees.
Comp time limits and rules by employee type
| Employee Type | Maximum Balance | Earning Rate | Cash-Out Rights |
|---|---|---|---|
| Standard Government | 240 hours | 1.5 hours per OT hour | Yes, at final pay rate |
| Public Safety | 480 hours | 1.5 hours per OT hour | Yes, at final pay rate |
| Private Sector | Not permitted | N/A | N/A - must receive OT pay |
More Perspectives
Sarah Chen, Payroll Tax Analyst
Perfect for new employees seeing comp time on their pay stub for the first time
Starting your first job with comp time? Here's what you need to know
If this is your first job where you see "comp time" on your pay stub, don't worry – it's actually a benefit that gives you paid time off instead of overtime pay.
The simple explanation
Think of comp time as "earning extra vacation days" when you work overtime. Instead of getting time-and-a-half pay (like 1.5 × $15 = $22.50 per hour), you get 1.5 hours of paid time off for every overtime hour worked.
Example for a $15/hour employee:
What to look for on your first pay stubs
1. "Comp Earned" or "CTO Accrued" – This shows how many comp time hours you earned this pay period
2. "Comp Balance" or "CTO Balance" – Your total banked comp time hours
3. "Comp Used" – Hours you took off using comp time (if any)
Important things new employees often miss
Questions to ask your supervisor
Key takeaway: Comp time is like earning extra paid vacation days when you work overtime – track your balance and use it strategically.
Key Takeaway: For new employees, comp time is extra paid time off earned from overtime work, appearing as hours on your pay stub with a 240-hour typical limit.
Sarah Chen, Payroll Tax Analyst
Specifically for public sector workers who are eligible for comp time benefits
Comp time rules for government employees
As a government employee, you have unique comp time benefits that private sector workers don't get. The Fair Labor Standards Act specifically allows public employers to offer compensatory time instead of overtime pay.
How comp time works in government jobs
Standard government employees:
Public safety employees (police, fire, EMS):
Pay stub differences in government jobs
Government pay stubs often show more comp time detail:
Special government comp time rules
Cash-out rights: Unlike private employees, you can usually cash out unused comp time when leaving government employment at your final pay rate.
Mandatory use: Your agency can require you to use comp time if you're approaching the maximum balance, but they must give reasonable advance notice.
Holiday/emergency work: Some agencies offer double comp time (3 hours earned per overtime hour) for working holidays or emergency situations.
Key takeaway: Government employees have stronger comp time protections and higher balance limits than private sector workers, with cash-out rights when leaving employment.
Key Takeaway: Government employees can bank more comp time (240-480 hours) and have stronger legal protections including cash-out rights when leaving employment.
Sources
- Fair Labor Standards Act Section 7(o) — Federal law governing compensatory time for public sector employees
- Department of Labor Fact Sheet #7 — Compensatory Time Off for Public Sector Employees
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.