Writing a paid-time-off policy from scratch is one of those tasks every small business hits and nobody enjoys. Answer the questions below and this free generator builds a clean, customizable PTO policy in seconds — covering accrual, eligibility, carryover, and payout. Copy it, download it, or print it, then have it reviewed before you adopt it.
A policy on paper still relies on someone tracking accruals, carryover caps, and payouts by hand — which is where errors and compliance risk creep in. HR software enforces your policy automatically.
See the Best HR & PTO Software →A strong PTO policy is specific and consistent. The most common mistakes small employers make are leaving key terms unwritten — what happens to unused time at year-end, whether PTO is paid out at separation, and who's eligible — which is exactly where disputes start. A clear written policy protects both you and your employees, and in most states it becomes the contract that governs time-off rights.
Three provisions deserve the most attention. Carryover determines whether unused time rolls over or is forfeited — and several states restrict use-it-or-lose-it forfeiture. Payout at separation is governed by state law in many jurisdictions, so a blanket "no payout" rule can be unenforceable. And accrual should be defined precisely so balances are predictable. Confirm your obligations on our PTO laws by state guide before finalizing, and see what happens to unused PTO at year end for the carryover rules. New to this? Our step-by-step guide on how to create a PTO policy walks through every decision.
Yes, completely free. Answer a few questions about your accrual, carryover, and payout rules and the tool builds a customizable PTO policy you can copy, download, or print. No sign-up required.
The generated policy is a customizable template for informational purposes only — it is not legal advice. Employment and wage laws vary by state and change over time, so you should have your final policy reviewed by a qualified employment attorney or HR professional before adopting it.
Most US small businesses offer 10 to 15 days of PTO per year for entry-level employees, rising to 15 to 20 days with tenure. There's no federal requirement to offer PTO at all; the right number depends on your industry, location, and what you need to stay competitive for talent. Our average vacation days guide has the benchmarks.
In many states, yes — but several states restrict or prohibit forfeiting earned PTO, and others require payout of unused balances at separation. Always confirm your state's rules on our PTO laws by state guide before adopting a use-it-or-lose-it or no-payout provision.
Yes. While no federal law requires PTO, once you offer it, state laws govern how accrued time is treated — especially carryover restrictions and payout at termination. A written policy that conflicts with state law is unenforceable to that extent, so check your state's requirements.
A combined PTO bank pools all paid time off into one balance employees use for any reason. Separate banks split vacation and sick leave into distinct buckets, which can be required in states with mandatory paid sick leave laws. Combined banks are simpler to administer; separate banks give clearer compliance tracking where sick leave is mandated.