Eleana Bowman
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Your guide to paid time off (PTO)
Last updated: October 7, 2022
Eleana Bowman
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Your guide to paid time off (PTO)
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One employee benefit that you've likely heard of is paid time off (PTO).

Employee PTO has replaced sick leave, vacation leave, and other leave entitlements for some companies.

69% of employees receive paid time off benefits. But up to 61% of eligible workers had unused paid time off at the end of the year.

We've put together the following PTO guide to help take the confusion out of paid time off.

We'll tell you what paid time off is and what you need to be eligible. Plus, we'll give you tips for planning your PTO!

What is paid time off?

PTO stands for paid time off or personal time off. If you're eligible for PTO, you'll get a set amount of paid days off work per year. Your pay for these days off will be the same as your regular wage.

You can usually use your leave for whatever you like. For example, you can use the days in your PTO bank to plan a vacation or care for a family member. You may have a doctor's appointment or just need a mental health day.

If there isn't a separate sick leave policy, your PTO can be used for sick days. And, if you get called in for jury duty, this is covered too. PTO is also often used to replace bereavement leave.

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However, paid parental leave is usually a separate policy.

Instead of having multiple leave policies, PTO is a one-size-fits-all approach. You don't have to explain your reasons for a day off, which could mean no more doctor's certificates.

You can also usually spread a PTO day over multiple days by just taking a few hours off a day.

There may be a specific process for taking paid time off, depending on the company. For example, your employer may need up to eight weeks' notice if you're planning a vacation.

State laws can vary, and if you leave your job, your employer may need to pay you for any unused PTO days.

What do you need to be eligible for PTO?

Your eligibility for PTO will depend on your company's policy. It's usually based on the number of days you work each week and years of service.

For example, most full-time workers with more than 35 hours a week will be eligible. But you may need to be with the company for a minimum of three months before you start to accrue PTO.

Some part-time employees may receive PTO benefits, depending on their employer.

Not all industries are the same, but your PTO hours can build up over time. Your unused hours can roll over at the end of the year, or you may receive a cash bonus.

What is unlimited PTO?

It's not common, but if you're lucky, your employer will have an unlimited PTO policy. Examples of brands that offer this perk include Netflix, LinkedIn, and Sony Entertainment.

This vacation policy lets you take as much paid time off as you need. You don't need to worry about going over your cap — because there is none.

But, there are usually a few conditions attached.

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You'll need to keep your work to a high standard and complete all your tasks on time. And the company will have a process for planned PTO time. For example, there may still be a limit to the amount of time you can ask for at once.

Unlimited PTO policies give you flexibility and a work-life balance. This time-off policy works best in organizations that have motivated team members and a positive workplace culture.

Employers who offer unlimited PTO can improve retention rates and reduce the risk of employees coming to work sick.

What is a standard PTO policy?

Every company is different. And not all employees will receive the same benefits.

Your job title, hours worked, and time at the workplace will influence your personal PTO plan.

Before PTO became the norm, companies had individual policies, including sick days, vacation leave, and personal days. Full-time team members would usually get around 30 paid days off each yea, eight sick days and two personal days. The remainder was for paid vacation leave.

A standard PTO policy usually includes around 20 days per year. If you have unused time, you may be able to save it for the future.

It's not uncommon to get paid company holidays on top of your allocated leave. Some common holidays that you may get paid time off for include:

  • Thanksgiving

  • Christmas

  • Memorial Day

  • Labor Day

  • Independence Day

  • New Year's Day

Employees may also have access to paid parental leave and unpaid time off.

What is unpaid time off (UTO)?

UTO stands for unpaid time off. It's similar to PTO, but it's leave without pay.

You can usually use UTO the same way as paid time off. For example, you can take unpaid sick time, personal days, and time off to care for a child. If you have PTO in your bank, you'll need to take this before you ask for UTO.

UTO may be offered to full-time, part-time, and casual employees. Those who aren't entitled to PTO may still get UTO. Some U.S. companies only offer UTO days with zero PTO days.

Even though you're not getting paid, the number of hours you get off will likely still have a limit. This way, your time off won't disrupt the workplace or leave your company short-staffed during peak periods.

Before asking for UTO, you should refer to the company policy. If it's for a vacation, your request may be denied if it doesn't suit the company's schedule.

Remember, taking too much UTO could have a negative impact on your employment.

The rules can vary between large corporations and small businesses. For example, in some states, if a company has over 50 team members, they may need to offer up to 12 weeks of UTO in a year.

This leave can be used for specific healthcare purposes, such as recovery from surgery and childbirth.

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Top tips for taking PTO

If you know you're going to need time off, here are our top tips to get it right. Before you request your PTO, consider these steps:

1. Plan your time off

Sometimes things happen unexpectedly. You might get sick, have an accident, or need to take your child to the dentist. In these circumstances, you'll need to ask for time off at short notice.

Before you contact your manager, make sure you understand the company policy. For example, how do they want to be contacted? Is a quick phone call enough, or do they prefer you to put your request in writing via email?

For other types of paid time off, such as vacation leave, don't leave your plans to the last minute. Before you lock in your getaway, check in with your manager. If you can give at least three to four weeks' notice, your request will be more likely to be approved.

This notice gives the employer time to find someone else to cover your shifts.

2. Avoid peak periods

Of course, there are times of the year when everyone is itching for a vacation. For example, people often like to take time off over the holidays to spend time with family.

If your company has traditionally busy periods, try to save your time off for a quieter time.

For example, taking time off during the Black Friday sales or the week before Christmas isn't recommended if you're a retail worker. Or, if you're an accountant, try not to take time off right before the end of the fiscal year.

Avoiding peak periods won't always be possible, but if you can, your manager will thank you for it.

3. Let your team know

Once you've decided on your PTO dates, it's time to let your team know. You'll usually need to fill out official paperwork with your preferred time off dates.

If your PTO includes sick days, try not to leave yourself short. Save some days in your bank in case you need them for an unexpected day off.

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Once you've told management, let the rest of your team know. If other people are going to be taking care of your duties, it's a good idea to prepare them in advance. You may have to share documents, discuss clients, or teach them how to use a computer program.

When you're away, you don't want work calls interrupting your trip.

4. Set up an autoresponder

If you work in an industry that relies on phone and email communication, you'll need to set up an autoresponder.

You'll only need an autoresponder if you're going to be away for more than two days. You can set your email to send an automatic response to let everyone know you're away from the office.

Here's an example:

Thank you for your email. I will be away on leave from (start date) until (end date).

I will answer your email when I return. If your inquiry is urgent, please contact (contact name) at (email address) or (phone number).

Kind regards,
(Your name)

And, you can change your business phone voicemail message to alert customers of your absence.

5. Enjoy your vacation

Are you using your PTO for a vacation? If you get to have time off work to travel and unwind, make sure you enjoy yourself.

A vacation is a chance to relax and recharge. It's your time, and you shouldn't feel obligated to check your emails or answer work-related queries.

Even if you're still getting paid, you don't need to be available.

Is sick leave the same as PTO?

If your employer has a paid sick leave policy, it'll only be valid for illness and other health-related reasons.

Sick leave may cover:

  • Recovering from a temporary or chronic illness

  • Caring for an unwell family member

  • Caring for children during a public health emergency

  • Getting medical tests or treatments

  • Getting help for domestic violence or sexual assault

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You can't use sick leave for vacations or other personal days off. But, if you have PTO hours and no specific sick leave policy, your time off can be for anything, including illness.

There's a downside to having one umbrella policy. If PTO covers everything, workers may come to work sick to save their PTO bank for a vacation.

Is vacation leave the same as PTO?

Some businesses have a dedicated vacation leave policy that employees are eligible for after a certain amount of time with the company. For example, new employees may get ten paid vacation days at the end of their first year.

These days can only be used for a vacation. They can't be redeemed as sick days.

Your eligibility for time off can vary depending on the industry. For example, 95% of manufacturing employees can get vacation days. The percentage drops to 82% for construction workers and 43% for hospitality workers.

If your company doesn't have paid vacation time, they'll usually have a simple PTO policy that covers time off for any reason, including a vacation.

What happens to unused PTO?

The rules and accrual rates for unused PTO vary between companies and states. In some workplaces, your PTO may roll over and continue to increase.

If you quit your job, you may be entitled to a payout that matches your unused PTO.

One of the perks that may come with your job is paid time off. PTO usually covers any time you have off, including sick days, vacations, and personal time.

There's a cap on how many PTO days you can take, and your hours can roll over into the next year. But some companies offer unlimited paid time off, and employees can ask for as much time off as they need.

Vacation and sick leave can be standalone policies. But, if your employer doesn't offer these options, they'll fall under the category of PTO.

If you're considering taking a vacation, we recommend planning your time off. Try to avoid peak periods and let your team know before you go. Don't forget to set up an autoresponder, and enjoy your vacation!


Ready to find a job that offers PTO? It's time to start your search. Use our job search to find openings in your area. Or you can head over to our Getting Hired Resource Center for more hints and tips.

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