Calculating Paid Time Off – What is the Best Option for Your Business?

Paid time off is a perk businesses can offer their employees to keep them happy and retain them over the long term. Different businesses have different approaches to PTO based on their unique requirements. Some are obligated by their local laws to provide some sick leave or paid time off benefits whilst others provide it as an added incentive for their employees. Here are some tips on how you can make it easier to calculate paid time off:

1. Create a Policy

The first step is to create a comprehensive policy for paid time off. This policy should clarify how many sick days, personal days, and paid time off is offered by the company. It should also explain how people can apply for the paid time off and request a copy of their PTO record. A strong policy will make it easier for people to keep track of their PTO and absences, which helps both the employees and the business.

There are several PTO policy templates available online and many PTO calculating software applications also provide a template to develop a strong policy. Make sure all of the intricacies of your paid time off setup are explained clearly in your policy to avoid disputes down the line.

2. Determine How Many Hours You Can Afford to Offer

Different businesses offer different levels of PTO based on their budget constraints and workplace requirements. Some companies provide a set number of hours per year and often include all kinds of paid leave options like sick leave, vacation, and personal days. Alternatively, other businesses offer a separate block of PTO just for sick leave. Determining the financial implication of how your business calculates PTO for your employees can be critical to the success of your bottom line.

3. Roll-Over Policy

Some people like to save their time off and only use it when necessary. Sometimes employees don’t use all of their PTO and the business has to decide how to handle that. For example, if your company offers 80 hours of PTO and the employee has only used around 60 hours, do you ask the employee to use up the rest, add the remaining hours to next year’s block, or use a no rollover policy? Consider the three options carefully before implementing them in your business.

It is easier to calculate paid time off if you use a dedicated software application. A well-designed app will help you keep track of all paid time off, make it easier for employees to submit PTO applications, and also help you craft a good policy. You can easily find affordable and reliable PTO software for your business.