How to Build a Fair PTO Policy

A good PTO policy is one of the most impactful things you can do for your team’s wellbeing — and one of the easiest to get wrong. Too restrictive and people burn out. Too vague and managers can’t plan.

Here’s a practical framework for building a policy that’s fair, clear, and simple to administer.

Start with the basics

Every policy needs to answer these questions:

How many days off does each person get? Define your annual allowance. Consider tenure-based increases.
What types of leave do you offer? At minimum: annual leave, sick leave, and parental leave. Many teams add study leave, compassionate leave, or volunteer days.
How far in advance must requests be made? Set a minimum notice period. 2 weeks is common for planned leave; sick leave is typically same-day.
Who approves requests? Usually the direct manager. Define a backup for when managers are away.
What happens to unused days? Carry-over rules prevent a “use it or lose it” culture while avoiding massive liability.

Make it equitable

Pro-rate for start dates. Someone who joins in July shouldn’t get the same allowance as someone who started in January.
Account for part-time workers. Allowances should scale with working hours.
Be consistent across departments. Different rules for different teams breeds resentment.

Document and communicate

Write it down. Put it somewhere everyone can find it. Review it annually. The best policy in the world is useless if nobody knows what it says.

Enforce it with tooling

Manual tracking invites inconsistency. A tool like Leavly applies your policy rules automatically — entitlements, carry-over, notice periods, and approval workflows — so managers don’t have to interpret the policy on every request.

Leavly is launching soon — get in touch to learn more.