Paid Time Off (PTO) policy template

A clear and consistent Paid Time Off (PTO) policy builds trust, supports employee wellbeing, and helps your business stay compliant across borders. This simple, flexible template makes it easy to define your company’s approach to paid leave, no matter where your team is based.

Important: Before using this template, check local labour laws and cultural norms where your employees work. PTO entitlements vary widely by country or region.

Customizable PTO policy template

[Your company name]
[Company address]
[Email]
[Phone number] (optional)

Effective Date: [Insert start date] 

1. Purpose of PTO policy 

This policy outlines how [Company Name] manages paid time off (PTO) for eligible employees. It details who qualifies for leave, how PTO is earned or accrued, the process for requesting time off, and how unused time is handled. The goal is to ensure consistency, fairness, and operational clarity across teams and locations.

2. Eligibility 

This policy applies to [all full-time employees / employees who work more than X hours per week], as defined by [Company Name]’s employment classification standards. Eligibility for PTO may vary based on factors such as employment type (e.g., part-time, temporary, or contract roles), location, and applicable local regulations. Specific entitlements should be confirmed in each employee’s offer letter or employment agreement.

3. PTO structure

[Select and customise one of the following options based on your company’s policy] 

[Option A] Unlimited PTO

[Company Name] offers an unlimited PTO policy for eligible employees. Time off may be taken as needed, subject to manager approval and adequate team coverage. While there is no fixed limit, employees are encouraged to take a minimum of [X] days per year to support work-life balance and wellbeing.

This policy is built on mutual trust and accountability, and all time-off requests must be submitted and recorded through [HR platform or process].

[Option B]  Accrual-based PTO ‌

Employees accrue paid time off based on length of service and employment classification. The standard annual accrual schedule is as follows:

• 0–2 years of service: 15 days per year
• 3–5 years of service: 20 days per year
• 6+ years of service: 25 days per year
  
  

Alternatively, PTO may accrue as follows:

Employees accrue [X] hours of PTO per [month/pay period], up to a maximum of [Y] hours annually.

PTO accrual begins on [employee’s start date / following a probationary period of X days]. Accrued leave balances can be viewed and managed via [HR system name].

4. How to request time off

PTO requests must be submitted through [your HR platform / to a manager] at least [X days] in advance.

In your request, include:

• Requested dates
• Coverage or handover plan (if applicable)
  
  

Managers will review and respond within [X business days], considering team availability and project timelines. If multiple employees request overlapping PTO dates, approval will be based on a combination of factors, including:

• Order in which requests were received
• Business and operational needs
• Coverage availability within the team
• Previous leave history (to ensure equitable access to time off)
  
  

5. PTO approval process

Managers are responsible for reviewing and approving PTO requests in a timely, consistent, and fair manner. All approvals must be documented within the designated HR platform to ensure transparency, maintain accurate records, and support organisational oversight.

6. Carryover

[Company Name] applies the following policy regarding unused paid time off (PTO) at the end of each calendar year.

[Select the appropriate option]

• No Carryover: Unused PTO expires on December 31 each year and does not roll over into the following year.
  
  
• Limited Carryover: Employees may carry over up to [X] days of unused PTO into the next calendar year. Any balance exceeding this limit will be forfeited.
  
  
• Unlimited Carryover: Employees may carry over all unused PTO from year to year without restriction.
  
  

Carried-over leave must be used by [expiration date], if applicable. All PTO balances and carryover limits are tracked and managed through [HR system/platform name].

7. PTO payout on termination

Upon separation from the company, whether due to resignation, dismissal, or other circumstances‌, employees will be [entitled / not entitled] to receive payment for any unused, accrued PTO, under applicable local laws and regulations.

Final PTO balances will be calculated as of the employee’s last working day and processed as part of the final paycheck. All time-off records must be kept up to date in [HR system/platform name] to ensure accurate calculation and compliance.

8. Public holidays

Public holidays are observed separately from PTO and do not count against an employee’s PTO balance.

Eligibility for paid public holidays is determined based on the employee’s primary work location and the applicable national or regional holiday calendar. [Company Name] maintains a list of observed public holidays for each supported location, which is accessible to employees via [HR system/platform name].

Employees working in countries with variable or location-specific public holidays will follow the schedule aligned with their jurisdiction.

9. Sick leave and other types of leave ‌

PTO does not apply to other forms of leave, such as sick leave, parental leave, or bereavement leave. These types of absences are governed by separate policies and may be subject to specific local laws and eligibility requirements.

10. Legal compliance

This PTO policy is intended as a general framework and may be adapted to comply with applicable labour laws in each jurisdiction where [Company Name] operates. In the event of any conflict between this policy and local legal requirements, the provisions of the relevant local law will take precedence.

How to build a PTO policy that works   

A strong PTO policy is more than a benefits document — it’s a foundation for trust, clarity, and consistency in your organisation. Whether you're creating your first policy or revising an existing one, keep these best practices in mind:

1. Start with legal compliance

Understand the labour laws in every jurisdiction where you employ people. This includes:

• Statutory minimum holiday or leave entitlements
• Paid public holiday requirements
• Carryover limits and expiration timelines
• PTO payout obligations upon termination
  
  

Be aware that laws may vary not only by country but also by state, province, or region.

2. Choose a policy structure that fits your organisation

Select a PTO model that aligns with your company’s culture, team structure, and compliance obligations. For example, 

• Unlimited PTO can work well in outcomes-driven environments but requires clear expectations and consistent tracking.
• Accrual-based PTO provides transparency and predictability, and may be required in some locations.
  
  

Hybrid approaches (e.g. a minimum baseline and additional flexible days) are also possible.

3. Define clear procedures

Spell out how employees should request time off, how much notice is required, and how decisions are made. Ensure your PTO policy addresses:

• How PTO is tracked and reported
• Who approves requests and within what timeframe
• What happens if multiple employees request overlapping dates

Clear documentation prevents misunderstandings and ensures fairness and trust across teams.

4. Address carryover, forfeiture, and payout

Let employees know what happens to unused leave at the end of the year:

• Is there a maximum number of days they can carry forward?
• Do they lose PTO if not used within a certain timeframe?
• Will they be paid for unused leave when they leave the company?

These rules should be consistent with local legal requirements and easy for employees to understand.

5. Support a healthy time-off culture

Encourage employees to take their time off regularly, not just when required. Consider:

• Setting minimum usage guidelines
• Leading by example at the leadership level
• Checking PTO usage data to spot burnout risks or underuse

A thoughtful approach to time off helps protect employee wellbeing and improves retention.

6. Review and update your policy regularly

PTO expectations evolve, as do regulations and workforce needs. Review your policy at least once a year to ensure it:

• Remains compliant
• Aligns with your operational realities
• Reflects your values and culture
  
  

Invite employees to share their feedback on the PTO policy — what’s working well, what’s unclear, and how it could be improved. Their input can help you build a policy that truly supports the whole team.

Effortless PTO management with Remote HRIS

Managing PTO across teams and even countries can become challenging, and build manual admin. A centralised platform like Remote HRIS can automate accrual tracking, configure region-specific policies, and ensure consistent, compliant PTO management across your organisation.

With Remote HRIS, you can:

• Build tailored PTO policies for different teams, roles, or countries
• Automate accruals, carryovers, and approval workflows based on regional rules
• Stay compliant with local labour laws and regulatory requirements
• Centralise leave tracking in one intuitive dashboard for full visibility
• Empower employees with self-service tools to request, review, and plan their time off
  
  

By reducing manual PTO tracking and standardising processes, Remote HRIS frees your HR and finance teams to focus on more strategic initiatives — while giving employees clarity and confidence in how their time off is managed.

Explore Remote HRIS today to streamline your global PTO policies with ease.

Disclaimer: This template is for informational purposes only and does not constitute legal advice.