How to Track Time Off for Employees?

Tracking time off is one of the cornerstones of running a successful business. Knowing which members of your staff are present or absent is crucial for creating schedules, planning meetings, and the smooth function of any team.

You can track employee time off in many different ways. We are here to explore the best ones and help you manage time off more easily.

What Is Time Off?

As the name says it, time off signifies the workdays your employees don’t work. All time off can be divided into two categories – paid and unpaid. Unpaid time off most commonly depends on a specific organization’s policies.

Paid time off, however, is more universal, even though there are different laws around the world that regulate PTO. These are the most common types of time off:

  • Vacation days
  • Personal time
  • Sick leaves
  • National holidays

Depending on the part of the world you’re in, you will have to follow different policies. This is especially important if you’re leading an international remote team. Hence, we recommend doing thorough research of the employee’s country’s paid leave policies.

Why Is PTO Important?

Paid time off may seem like a loss for your company. After all, you are paying your employees for the time they don’t spend working. However, following a PTO policy is important for multiple reasons

Regulatory Compliance

If your or your employees’ country has a mandated number of paid days off you will have to follow those guidelines. Otherwise, you may have legal problems. Then you may face fees far higher than what you’d pay your employees, or even penalties to your company.

Employee Wellbeing

Working with no vacation time in sight is sure to make any employee unhappy. Spending some time outside of the offices and dedicating it to hobbies, friends, and family is a great way to prevent overwhelming amounts of stress. Not to mention that burnout is one of the most common issues a modern employee faces. Taking some time to dedicate to yourself and your interests is crucial to prevent it.

On the other hand, time off is also important for any company, as it will reduce time theft. Working non-stop is sure to discourage any employee, and make them look for ways to cut corners.

Even if the time theft isn’t deliberate, or doesn’t happen, working with no vacation time will discourage your team and make work mistakes more common.

In other words, letting your employees have some time off will work for the employer as well. Your employees will come back to the offices refreshed, energized, and ready to handle daily stress.

In turn, this will reduce turnover in your company. As you understand yourself, this is a great thing, as you won’t have to spend time, manpower, energy, or resources on recruitment and training of the new employees, and your team will be more cohesive.

Time Off Policies

While time off is important in and of itself, having a firm grasp on everyone’s PTO is even more important for your organization. That is why you need to create a system of tracking how much time off your team members have left. This isn’t an easy feat no matter the size of your company.

The first thing you should look at is your country’s laws regarding work time. If there is a minimum of paid days off, you should start from that. On the other hand, if there aren’t any regulations (for example in the US there is no mandatory paid leave), you should draft your own policy depending on your company’s needs and capabilities.

Whether you decide to give your employees the minimum number of paid days off or be more generous is completely up to you. However, you need a starting point. The number of days off is usually given on a yearly basis, which is a great way to start formulating your policy.

You can give all your employees the same number of paid days off every year. In contrast, some companies, and even labor laws assign days off based on an employee’s position in the company or years of work experience. Finally, some companies have started the practice of giving an unlimited number of paid days off. This is another important element you should include in your PTO policy.

How to Implement the Policy?

Now you’ve regulated the number of days your employees can be absent and still get paid. The next question is how to make this regulation a reality for all staff. Fortunately, we are here to help.

Time Off Balance

As we have mentioned, time off is usually determined at the beginning of the year. As the year progresses, your employees will be using up their time off, and you will have to keep track of their remaining PTO. Even in companies that offer unlimited days off, it is good to know how much time each employee spent outside of their office. This is called time off balance. You need to keep your eye on this number, as many employees can get confused and lose track of their remaining free days.

That is why it is important to create a system that will account for and tally up the spent and remaining free days for each employee.

Accruals for PTO

Most companies decide to take an accrual approach to time off. To put it simply, an employee will get a certain number of free days or hours for each period they’ve spent working (for example, some full-time employees receive 1.6 days of PTO each month).

If an employee works full-time, it will be easy to calculate the accruals. However, if your staff works part-time or on an hourly basis, you will have to calculate their accruals.

What Is the Solution?

Using a time tracking platform is a great way to account for all hours worked and time accrued. It is also a handy way to calculate how much PTO each employee has left. Simply put, time tracking platforms have all the data you need to calculate the time off an employee has accrued or spent, as they follow all the work time of each individual employee.

Some companies keep an Excel sheet or some other form of documentation to account for PTO. In these cases, many decide to delegate this task to HR.

Using a time tracking system to determine the amount of time off is especially convenient for large organizations. The larger the number of departments, the more difficult it will be for a single person to keep track of everything.

Furthermore, having a system that tracks your employees’ time off will eliminate human mistakes and relieve the stress of an added task from your HR personnel.

Handling Time Off Requests

Time off requests usually have to go through some sort of approval. Most often this means talking to a manager. That is why it’s very important to be accurate when it comes to your PTO tracking software and its permissions. Simply put, managers will have to have access to time off logs to be able to approve time off requests.

Some time tracking software, as well as payroll platforms also automatically track and approve time off. However, some kind of control needs to be in place, as you cannot have too many members of the same team out at the same time. This is especially applicable during crunch time. Hence, a manager must make sure your company isn’t understaffed.

Still Not Sure?

Finding the best way for managing time off isn’t simple. You need to recognize the different factors that will affect your decision.

  • The company budget doesn’t always allow for a dedicated system to track employee time off
  • The size of your company can affect the way you manage PTO
  • Labor laws and other regulations sometimes require a specific way of keeping track

As you can see, there isn’t a universal solution for all organizations. That is why you should take all aspects of both your company and labor regulations. Then you will be able to plan the best course of action.

You can track paid time off in many different ways – with a dedicated platform, a time tracking solution, through HR, or a vacation and sick time spreadsheet. The most important thing to remember is to find a solution that fits your company’s needs best and stay consistent once you start tracking PTO.


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