PTO Policy Examples for Small Businesses (3 Real Models)

These are examples of a combined PTO bank — one pool covering vacation, sick days, and personal time. It's the simplest structure to administer and the one most small companies land on.

The numbers change by company, but the structure shouldn't: eligibility, amount, earning method, request process, approval rules, carryover, and payout. Each example below is annotated with what it gets right and the size of team it suits.

Two neighbours worth knowing about: if you keep vacation and sick time in separate buckets, see the vacation-only policy examples. If you want one finished document to copy rather than three to compare, the sample PTO policy is a single complete text.

Before using any sample: Waiting periods, advance notice, manager discretion, expiry and full-time-only eligibility describe discretionary vacation only. They must not restrict statutory sick leave, any-reason paid leave or other protected absences. A combined PTO bank must preserve every applicable statutory right. Verify current requirements directly with the state and local agency for each work location.

Example 1: Simple annual PTO bank¶

Full-time employees receive 15 days of PTO per calendar year. New hires receive a prorated balance based on their start date. PTO may be used for vacation, personal time, or illness unless a separate sick leave policy applies.

Requests should be submitted at least two weeks in advance when possible. Managers approve requests based on business needs and team coverage.

Employees may carry over up to 5 unused days into the next calendar year, where permitted by law.

This is the best starting example for many small businesses. It is easy to explain and does not require monthly accrual math.

Example 2: Accrued PTO¶

Full-time employees accrue PTO each pay period up to an annual total of 15 days. PTO begins accruing on the first day of employment and may be used after 60 days.

Employees may not use PTO before it is accrued unless approved in writing. Unused accrued PTO may carry over up to a maximum balance of 20 days.

Upon separation, unused accrued PTO is handled according to company policy and applicable law.

This example is better when you want more control over earned balances. It needs accurate tracking, especially if employees are hourly or paid biweekly.

Example 3: Unlimited PTO¶

Employees may take PTO as needed, subject to manager approval, business needs, and team coverage. There is no fixed annual PTO bank.

Employees are expected to plan absences responsibly, communicate coverage needs, and take meaningful time away from work each year.

Unlimited PTO does not replace legally required sick leave or other protected leave.

Unlimited PTO can be attractive, but it is not a shortcut around management. It needs written expectations so employees know what "reasonable" means.

What these examples have in common¶

Each example answers the same operating questions:

• How much time off is available?
• When does it become available?
• How does an employee request it?
• Who approves it?
• What happens to unused time?
• What happens when employment ends?

If your draft does not answer those questions, it is not complete yet.

Choosing the example that fits¶

Choose the annual bank if you want the lowest admin burden. Choose accrual if you need balance precision. Choose unlimited if your team already has strong trust, clear goals, and managers who take vacation themselves.

If you want a fill-in-the-blank version, use the sample PTO policy for small businesses or the vacation policy template.

Bottom line¶

The best PTO policy example is specific enough to enforce and simple enough to remember. Pick the model that fits your team, adjust the details, and keep the workflow visible.