PTO policy template: free, customizable, ready to copy
Also known as: Paid time off policy template, Vacation policy template, Leave policy template, Annual leave policy template
A free paid time off (PTO) policy template that sets out how much leave employees earn, how to request it, who approves it and what happens to unused days. Replace the bracketed placeholders with your own numbers and check them against the leave law where your employees work.
A PTO policy answers the questions employees ask most: how many days do I get, when can I use them, how far ahead do I have to ask, and what happens to the days I do not use. Written down, it also protects the company, because every manager applies the same rules. This template covers annual leave and other paid time off in one policy. Sick leave, parental leave and other statutory leave usually follow their own rules, so the template points to them and does not repeat them.
POLICY HEADER
[COMPANY LEGAL NAME] Paid Time Off (PTO) Policy Version: [1.0] Effective date: [YYYY-MM-DD] Policy owner: [HR / PEOPLE TEAM / ROLE] Applies to: [ALL EMPLOYEES / EMPLOYEES IN COUNTRY]
1. PURPOSE AND SCOPE
This policy explains how paid time off works at [COMPANY NAME]: how much you earn, how to request it and what happens to days you do not use. It applies to [ALL EMPLOYEES / FULL-TIME AND PART-TIME EMPLOYEES / THE GROUPS LISTED ABOVE]. Where the law of the country in which you work gives you more than this policy, the law applies.
2. ENTITLEMENT
Full-time employees receive [NUMBER] paid working days of PTO per leave year. The leave year runs from [1 JANUARY] to [31 DECEMBER]. Length of service: [After [X] years of service the entitlement rises to [NUMBER] days. / The entitlement does not change with length of service.] Part-time employees receive PTO in proportion to their contracted hours, for example [NUMBER] days for [X]% of full-time hours. New employees receive PTO in proportion to the months they work in their first leave year.
3. HOW PTO ACCRUES
[OPTION A: The full yearly entitlement is available from the first day of the leave year.] [OPTION B: PTO accrues monthly at [ENTITLEMENT / 12] days for each full month worked.] You can request PTO that you have not yet accrued if [it will be accrued by the end of the leave year and your manager agrees / this is not allowed].
4. REQUESTING AND APPROVING PTO
Request PTO in [HR SYSTEM / BY E-MAIL TO YOUR MANAGER] at least [NUMBER] days before the first day of leave. For leave of [5] working days or more, request at least [NUMBER] weeks ahead. Your manager will reply within [NUMBER] working days. Requests are approved unless the team cannot be covered. If a request cannot be approved, your manager will explain why and suggest other dates. Busy periods: [LIST PERIODS, FOR EXAMPLE YEAR-END CLOSE, PEAK SEASON]. PTO in these periods needs approval from [ROLE]. If you are unable to work because of illness, do not use PTO. Follow the sick leave rules in [LINK TO SICK LEAVE POLICY].
5. PUBLIC HOLIDAYS
Public holidays in the country where you work are [IN ADDITION TO / INCLUDED IN] your PTO entitlement. The holiday calendar for each location is published at [LINK / LOCATION]. A public holiday that falls inside a period of PTO [IS NOT / IS] counted as a PTO day.
6. CARRY-OVER AND EXPIRY
You may carry over up to [NUMBER] unused PTO days into the next leave year. Carried-over days must be used by [DATE]. Days above the carry-over limit [EXPIRE / ARE PAID OUT AT [RATE] / ARE HANDLED AS REQUIRED BY LOCAL LAW]. We encourage everyone to take at least [NUMBER] consecutive working days of PTO each year.
7. PTO WHEN EMPLOYMENT ENDS
If your employment ends, [UNUSED ACCRUED PTO IS PAID OUT WITH YOUR FINAL PAY / UNUSED ACCRUED PTO IS TAKEN DURING THE NOTICE PERIOD / THE TREATMENT REQUIRED BY LOCAL LAW APPLIES]. If you have taken more PTO than you have accrued, [THE DIFFERENCE IS DEDUCTED FROM YOUR FINAL PAY WHERE THE LAW ALLOWS / NO DEDUCTION IS MADE].
8. OTHER LEAVE
This policy does not cover sick leave, parental leave, bereavement leave or unpaid leave. These are described in [LINK TO LEAVE AND ABSENCE POLICY].
9. QUESTIONS AND CHANGES
Questions about this policy go to [HR CONTACT NAME / E-MAIL]. We may update this policy with [NUMBER] days' written notice to employees. Changes will not reduce PTO that you have already accrued.
When to use this template
- A new company that has no written leave rules yet
- A team that has run on informal agreements and now needs one rule for everyone
- A new country entity, where you copy the policy and adapt the numbers to local law
- A change from a fixed yearly grant to leave that accrues month by month
What the policy has to decide
- Entitlement: how many paid days per year, and whether it grows with length of service
- Accrual: all at once at the start of the year, or month by month
- Requests: how far ahead to ask, who approves and how fast they answer
- Busy periods: dates when leave needs extra approval or is limited
- Carry-over: how many unused days move into the next year and until when
- Public holidays: whether they sit inside or outside the leave entitlement
- Termination: what happens to a positive or negative balance when someone leaves
- Other leave: where sick, parental and unpaid leave are covered
Customization notes
Section 2: set the entitlement at or above the statutory minimum for each country. Where you employ people in several countries, keep one policy structure and one schedule of entitlements per country. Section 3: choose option A or option B and delete the other. Accrual is easier to defend if someone leaves early. Up-front grants are easier to explain. Section 4: keep the request lead times short enough to be realistic. Long lead times produce exceptions, and exceptions produce unequal treatment. Section 5: state the rule on public holidays inside leave periods, even if the law already decides it. Employees ask about it every year. Section 6: check whether unused statutory leave may expire or must be paid out in your country before you set an expiry date. Remove every bracketed option you do not use. A policy that still contains square brackets is not a policy.
Frequently asked questions
What should a PTO policy include?
At minimum: who it applies to, the yearly entitlement, how leave accrues, how to request and approve it, how public holidays are treated, carry-over and expiry rules, and what happens to the balance when employment ends.
How many PTO days should we offer?
At least the statutory minimum in each country where you have employees. Beyond that it is a business decision that depends on your market and budget. Treat any extra days as part of the total package.
Should PTO accrue monthly or be granted up front?
Both are common. An up-front grant is simple and generous but leaves a balance to recover if someone leaves early. Monthly accrual follows what the employee has earned and needs a system to keep count.
Do we need separate policies for sick leave and parental leave?
Usually yes, or a combined leave and absence policy. These types of leave are often governed by their own rules and should not be mixed into the PTO balance.