PeopleMuster

Leave and PTO policy template

A leave policy, or a PTO policy in US wording, answers three questions in writing: how many days, of which type, and who says yes. The template below does that in ten short sections. Section 3 gives you two ways to set it up. Keep separate leave types, or pool the days into one PTO bank, then fill in the numbers and send it.

Reach for this when leave is being granted by memory and mood. A team of five can run on goodwill; a team of twenty-five can't, because two managers will answer the same request two ways. Pick option A if you want sick days and holiday days counted apart. Pick option B if you'd rather give one PTO number and let people spend it. If your quotas already sit in employment contracts, copy those numbers into section 3 rather than setting new ones here.

LEAVE AND PTO POLICY — [COMPANY NAME]
Effective [EFFECTIVE DATE] · Owner: [POLICY OWNER] · Review: [REVIEW MONTH], yearly

1. WHO THIS COVERS
All [PERMANENT / CONFIRMED] staff. [STATE WHETHER INTERNS, PROBATIONERS AND
CONTRACTORS ARE COVERED, AND FROM WHICH DAY.]

2. THE LEAVE YEAR
Our leave year runs [LEAVE YEAR START] to [LEAVE YEAR END]. Quotas reset on
the first day. A joiner mid-year gets a share of each quota, counted by whole
months worked.

3. HOW TIME OFF IS COUNTED
Keep ONE of the two options below and delete the other.

OPTION A: SEPARATE LEAVE TYPES

  Type            Days per year      Paid?    Approver
  Annual          [ANNUAL DAYS]      Yes      [LINE MANAGER]
  Casual          [CASUAL DAYS]      Yes      [LINE MANAGER]
  Sick            [SICK DAYS]        Yes      [LINE MANAGER]
  Bereavement     [BEREAVEMENT DAYS] Yes      [HR CONTACT]
  Marriage        [MARRIAGE DAYS]    Yes      [HR CONTACT]
  Parental        [PARENTAL DAYS]    [YES/NO] [HR CONTACT]
  Unpaid          As agreed          No       [DEPARTMENT HEAD]

OPTION B: ONE PTO BANK

  Paid time off (PTO): [PTO DAYS] days per year, paid, approved by
  [LINE MANAGER]. Use PTO for holidays, personal days and short illness
  alike. You don't need to say why you are taking it.

  Kept outside the bank (these never use up PTO):
  Bereavement     [BEREAVEMENT DAYS] Paid     [HR CONTACT]
  Parental        [PARENTAL DAYS]    [YES/NO] [HR CONTACT]
  Unpaid          As agreed          No       [DEPARTMENT HEAD]

4. HOW MUCH NOTICE
Planned days off: [NOTICE DAYS] days ahead, and [LONG LEAVE NOTICE] days ahead
for more than [LONG LEAVE LENGTH] days in a row.
Same-day absence: tell [LINE MANAGER] by [SAME-DAY CUT-OFF TIME].
Illness: as early as you can, with a note after [SICK NOTE AFTER] days away.

5. HOW TO REQUEST
Raise the request in [LEAVE SYSTEM]. Your approver has [APPROVAL WINDOW]
working days to answer. An unanswered request is not an approved one. Chase it.

6. WHEN A REQUEST IS REFUSED
Leave can be refused when too many people in one team are already out, or
when a committed delivery date falls in that window. A refusal says why, in
writing, and offers another window.

7. UNUSED DAYS
Unused days [KEEP ONE: LAPSE / CARRY OVER / ARE PAID OUT AT EXIT].
If they carry over, the most you can carry is [CARRY-OVER CAP] days.
Under option A, casual and sick days never carry over.

8. PUBLIC HOLIDAYS
The company holiday calendar is published each [CALENDAR MONTH] for the year
ahead. Holidays never come out of your quota or your PTO bank.

9. WHILE YOU ARE AWAY
Name a cover person in the request. Hand over open work before you go.

10. CHANGES TO THIS POLICY
Changes are announced [CHANGE NOTICE] days before they apply. Days already
approved stay approved.

Approved by [APPROVER NAME, TITLE], [APPROVAL DATE].

What to put in each blank

[PERMANENT / CONFIRMED]
Name the staff group in the words your contracts use. If probationers earn leave from day one, say so in the next line.
[LEAVE YEAR START]
Most teams use the calendar year. A leave year that matches your financial year makes payout and carry-over simpler to count.
[ANNUAL DAYS]
Write a whole number. If contracts already promise a figure, use that figure; this policy should never give less than a contract does.
[PTO DAYS]
Option B only. Add up the annual, casual and sick days you would have given under option A. Starting from that total keeps the switch fair.
[PARENTAL DAYS]
Set this with care and have a local adviser read it. Parental leave rules differ more between countries than any other line in the table.
[APPROVAL WINDOW]
Two working days is a common choice. Pick a number your managers will really meet, because a missed deadline teaches people to book leave late.
[CARRY-OVER CAP]
Keep it small, often five days or fewer, so an old balance doesn't pile up into one long absence at year end.

Before you send it

  • Choose option A or option B before anything else, then set the numbers. Every other clause hangs off that choice, and a policy that keeps both options confuses everyone.
  • PTO is the US word; leave is the word most other places use. The document works the same under either name, so use the one your team says out loud.
  • Write one carry-over rule, not three. Lapse, carry or pay out. Teams read any ambiguity as whatever suits them.
  • Leave entitlements and payout rules differ by country and often by contract type. Have someone who knows your local rules read this before it goes out.
  • Add the leave types your team actually takes and drop the rest. A row nobody uses only makes the table longer.
  • In PeopleMuster each leave type is a record with an annual quota and a paid or unpaid flag, and it can be marked encashable. Quotas are set per person, per type, so the grid shows days used against days allocated for every employee. A PTO bank is one leave type with one quota. Approved leave comes off the capacity plan straight away.

PeopleMuster sets leave quotas per person and per type, with approvals

Questions people ask about this letter

What is the difference between a PTO policy and a leave policy?

A PTO policy usually pools holiday, personal and sick days into one bank. A leave policy usually keeps them as separate types with their own quotas. Both answer the same questions: how many days, who approves, how much notice. This template covers both in section 3.

Should sick leave come out of the PTO bank?

Under option B it does, and that's the point of a bank: people spend days without explaining why. Under option A sick days stay apart, so you can see illness patterns that one pooled number hides. Pick the one you would rather measure.

What notice should planned time off need?

Seven days ahead works for most small teams, with a longer window for anything over a week. Pick a number you will actually enforce. A notice rule nobody applies teaches people to ignore the rest of the policy.

Do we have to say what happens to unused days?

Yes, or someone will assume the answer that favours them. The three common choices are lapse, a capped carry-over and payout at exit. Payout rules can have tax and contract effects, so check yours locally.

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