Use pressure treated wood in any situation where there’s direct contact between the wood and anything that could supply moisture. This means posts in contact or buried underground obviously, but it also includes any lumber touching concrete or masonry since it’s porous and wicks water like a sponge.
As long as there’s a good chance that moisture can reach the wood, it should be pressure treated. This is why the International Building Code requires that siding and structural lumber used for the last six inches of the structure above the ground is pressure treated. Subflooring in the kitchen and bathroom may also be pressure treated since water leaks are common in these rooms and subflooring is inaccessible to the residents.
So if pressure treated wood resists the damaging effects of moisture and insects, why isn’t it used for your entire home? It’s because the chemicals used to pressure treat wood aren’t safe for humans. You can find arsenic in all older pressure treated lumber and some new materials, while copper is widely used in even the newest pressure treatment formulas.
If you touch the wood and pick up these chemicals and then rub your eyes or eat some food, you could ingest something that could make you sick over time. This is why non-pressure treated wood is still required for use indoors, and why builders recommended that you only use pressure treated lumber for the support structure of a deck and switch to untreated wood for the surface.
Any location where pets and kids spend time regularly should be built with non-treated wood. This includes play sets, decks, raised beds in gardens, and more. Using a naturally rot-resistant wood, like cedar is a better compromise that is potentially putting your loved ones at risk for serious health problems.