Types of Paid Time-Off Policies By Companies

Saibu Baba

Saibu Baba

4 min read


Types of Paid Time-Off Policies By Companies

Paid time-off is a benefit employees derive from their employers. Paid time-off benefits include vacation time or annual leave, personal time-off, sick leave, holidays, maternity or paternity leave and holidays. It is important to note that when creating your team’s paid time-off policies, you must take into consideration the long term results or consequences for the company and employees as well. RemoteTeam is one of the best platforms that helps businesses customize paid time-off policies that better fit their employees.

Paid Time-Off

Business owners or employers can either choose from the pre-packaged time off policies or create their own instantly. Employees can easily request for sick days for approval from their employers. Business owners can also submit time-off on employees’ behalf. Paid time-off requests are synchronized automatically to calendars and payroll so everything is streamlined to make processes easier. RemoteTeam also has local holiday support for its employees. Employers can create new policies for their employee’s local holidays so that they can also feel culturally supported within the organization.

Let us take a look at the paid time-off policies some companies have adopted;

Traditional Paid Time-Off

The traditional paid time-off, also known as fixed time-off policy, offers employees a fixed number of days to take off in a given period. This type of policy is renewed and days that were not taken off in the period given cannot be carried forward in the next renewal period. This policy time-off policy is allocated to specific areas such as sick leave or vacation leave. Some companies tend to increase the number of time-off days the more an employee stays longer in the company or organization.

Flexible Paid Time-Off

With the flexible paid time-off, employees can take time-off when they choose to and do not necessarily need to accumulate the time-off spent. Employees can choose to use their time-off for vacation or sick leave as and when needed. Flexible paid time-off combines sick time-off and vacation time-off. Flexible time-off policies have proven to be a great advantage for a company or organization that has a diverse workforce. Since such a workforce is likely to work or come from different backgrounds, this policy helps them take time off to celebrate the holidays in their respective countries.

Unlimited Paid Time-Off

With unlimited PTO, in as much as employees benefit a lot from it, employers also gain some benefit from this policy in the sense that employees either use it or do not use it. Employees do not cash out on the accrued vacation time when they haven’t used it. Unlike the traditional paid time-off where employees know that they have a specific number of days to take off, whether it’s 5 days or 10 days, unlimited time-off does not have any specific amount of time employees can take off. This policy can be under utilized or over utilized. Some employees wouldn’t want to take a lot of days off because they may not want to be perceived as lazy by their employer.


Employers have found paid time-off policies to be very efficient for both them and their employees. A well-structured time-off policy provides great benefits. Employees become happy and work effectively. Employers also have control over unplanned absences by their employees.

Further reading

Time-Off Policy Types & Examples from Remote Companies

How to Manage Time-Off for Remote Teams

Crafting an Optimal Time-Off Policy for Remote Teams

Saibu Baba
Written by Saibu Baba

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