written by | April 20, 2022

What is PTO? Definition, Types and Tips

Many businesses use the term paid time off in place of sick leave, vacation time leave, personal leave, etc. PTO means an employee's paid time that is away from the workplace. Many businesses track the off time of their employers based on different categories mentioned above, such as vacation time leave, sick leave, and personal day leaves. The business policy of PTO combines all these types of leaves. It allows the employees to use the time they need for sick leave, vacation leave, etc. Paid time off helps maintain the balance between professional life and personal life. PTO leaves are also important for the physical and mental health of the employees.

Did you know?

69% of workers don't take sick leaves even when they are sick and put other co-workers at risk.

What is PTO?

The full form of PTO is paid time off. It is the employee leave policy introduced by the companies in which the company grants a specific number of PTO leaves to its employees for which there will be no loss of pay. The PTO leave means that employees' payments won't be deducted even when they have not come to work for a specific period.

There are several reasons why a company offers PTO leaves to the employees. These reasons are marriage, sickness, vacation, personal time, etc. Employees can take such leaves when they want as per their convenience. Paid time off leave is one of the primary benefits offered by the companies to its employees, and this benefit act as a plus point when the companies are hiring new employees.

The policy of PTO allows the employees to accrue their leaves over a while. If an employee has worked for the whole month, several leaves will accrue (accumulate) in his PTO leave balance. The employees can use this PTO leave balance as and when needed.

Types of PTO

There are several kinds of PTO a company offers to its employees. It is advised that you must always inquire about such PTO leaves when negotiating the benefits package. You must also ask whether this PTO leaves increases with the longer time you are with the company. Many companies offer you more PTO leaves if you work with them for a longer period. It is done to encourage the employees and to gain more loyalty points. The different types of PTO that a company offers are :

Also Read: Leave Management Guide for HR Managers

1. A Set Number of Days

If you are given paid time off based on a set number of days, then it means that you are offered a specific number of leaves per year. New employees are generally placed in the company on a probationary period. So it is common that these new employees won't be eligible for any paid time off.

For example, if the company's employer has granted you ten days of PTO leaves, you cannot take any PTO for the first 90 days of joining.

After completing the probationary period, you will be given full benefits of paid time off.

2. Accrued Time Off

You can accumulate a certain amount of time for each pay period in the accrued time off system. To calculate your paid time off, you will receive each pay period. You can multiply the number of days with the time you give on those working days.

For example, if you get 20 days of PTO to leave and work for 8 hours per day, you have got 160 hours (20X8) per year. Now divide these hours by 52, i.e. the number of weeks in a year, which will give you the number of years you can accumulate per week.

3. Sick Leaves

Giving the benefits of sick leaves in the PTO helps the company employees recover from the illness without worrying about the deduction of their pay. A company offers a fixed number of sick leaves as PTO based on the company's policy. A company may also ask for medical certificates if the employees take longer leave.

4. Vacation Leave

Everyone wants a break from their work. Employees of the company may apply for vacation leave when they want to have a break from their work. They can apply for two to three days of PTO as vacation leave to go on a vacation or spend some time with their family. The vacation leave helps the employee to get relaxed and recharge.

The company must mention the terms and conditions for availing such vacation leave as PTO. These terms and conditions include :

1. When the employees can avail this leave?

2. How early the employee must notify the management about his leave?

3. How will the company manage work in his absence?

5. Rollover Allowances

The companies also grant the option to employees to roll over their PTO leave from one year to the next year.

For example - Suppose you are given 20 PTO leaves this year. If you have only availed 15 leaves, then you can roll over the remaining five days of PTO leave to the next year. This means that you will be given a total of 25 PTO leaves next year.

6. Personal Leave 

The type of leaves that an employee avails for doing his activities like doctor's appointments, attending events, repairing vehicles, visiting the bank, etc., falls under the category of personal leave PTO.

7. Optional Leave 

Some days are commonly celebrated throughout the country, and some are recognised as a public holiday. But they are not officially granted by the company an off day. Instead, these days are given as an optional PTO that the employees can avail of if they wish to take them off on that day. The company allows its employees to avail a specific number of optional leaves as PTO. For example, a company's policy may allow only five optional PTO leaves from the entire list of 15 occasions.

8. Parental Leave 

The employees can avail this category of PTO when they become a parent. This is further divided into maternity leave and paternity leave. The maternity leave is supposed to be availed in one go and is a long-duration PTO. On the other hand, paternity leave can be split up and used by an employee per his convenience who has become a new father. The paternal leaves can be availed even if the employee has adopted a baby. Some companies also put a cap on the number of times an employee can avail paternal leave.

Tips to Plan your PTO

Taking off from work helps to remove stress levels and keeps the business employees more motivated to pursue their business goals. The employees must plan their PTO leave time. Certain tips that you must follow to plan the PTO are :

1. Plan Your PTO 

You must go through the calendar and block the dates when you are not available for any business work or meetings. This will help you plan your schedule accordingly and identify any deliverables that might come your way.

When you plan your dates, it will help you to complete the priority tasks earlier and allows you to get the work done faster. The company can also prepare to manage the work in your absence in advance. You must also check that the workers who will work in your absence know your work and responsibilities. You must schedule a meeting with them before availing of PTO to make them understand how to complete those responsibilities successfully.

Also Read: Leave Travel Allowance (LTA)– Its Calculation, Rules and Exemption

2. Plan Your Meetings Appropriately

You must leave the plan of your business open and must avoid scheduling the meetings a week before the paid time off. This will give you more time to finalise your projects and complete your pending tasks that need to be completed before taking PTO to leave. It would help if you stuck to your company's guidelines regarding paid time off. You should not worry about login into your work while refreshing your mindset.

Conclusion

Employees of the company need a long paid time off. A company gains more popularity if it has an attractive time-off policy. Employees can take a break from their work without affecting their paycheck. The companies also benefit from paid time off since the employees return with more energy after availing of PTO leaves. The employees get more focused on their work after unloading their stress. Offering different kinds of PTO to the employees gives a clear reason for taking leaves by the employees. Due to this, the company can better understand their employees' situation in a better way. The company can also track which leaves are availed maximum times. The companies must include paid time off in their policy to give flexibility to the employees.

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FAQs

Q: What is the importance of the PTO tracking platform?

Ans:

PTO tracking platform helps to help the business to manage time off, helps the employees to ask for leaves and maintains the record of who is at work and who is not.

Q: Is it legal not to grant PTO leaves?

Ans:

Companies have no compulsion to grant PTO leaves to the employees, and the companies decide to grant paid time off to improve employee productivity.

Q: How many PTO leaves are considered sufficient?

Ans:

As per a survey, an average Indian gets ten days of PTO leaves per year.

Q: What are the different types of PTO offered by the companies?

Ans:

The different types of PTO leaves are - sick leave, vacation leave, parental leave, accrued time off, and many more.

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