The HR Dictionary

Paid Time Off (PTO)

PTO, also known as paid time off, planned time off, or personal time off (PTO), is a provision found in some employee handbooks that enables employees to access a bank of hours that the company accumulates by combining sick days, vacation days, and personal days. This policy mostly applies to residents of the United States, since there is no minimum requirement for the number of paid vacation days under federal law. Instead, American businesses decide how much paid time off to provide workers while keeping in mind the benefits of attracting and keeping workers.

PTO hours, which are increasingly common in the field of human resource management, often encompass everything from pre-arranged vacations to sick days. PTO programs do not differentiate between employee absences and personal days, vacation days, or sick days, in contrast to more conventional leave policies. The number of PTO hours provided annually as well as the "rollover" policy are decided by the firm once an employee is hired. Some employers only allow PTO hours to accrue for a year, after which time any unused hours are forfeited.

Most of today’s HRIS solutions can effectively manage PTO/Leave as per the organization's PTO policies. Most advanced HRIS solutions contain the ability to set pay and leave policies to automate all these administrative HR tasks and save time spent on manual calculations.