Tip:
If you’re using the setup experience, follow its steps to complete the setup there.

Time off policies establish how your employees request and accumulate time off. Each time off type you create can have multiple time off policies. This enables you to manage different market-specific requirements within a single time off type. You can use one of our country-specific templates to help you with the creation process. This approach offers several benefits:

Reduced complexity: Minimize administrative tasks by decreasing the number of time off types you need to manage.
Flexibility: Adapt to local regulations, ensuring compliance across various markets.
Efficiency: Streamline your time off management process, making it more effective for your organization.

If you’ve started implementing Time off after 8 March 2026, the information in this article doesn’t apply to you, as you have access to an updated version of time off policies. Read this article for relevant information.

Before you start

To create time off policies, you need edit permission to the Account configuration > Time off section.
You can assign different policies to different employees, but each of them can only have one time off policy per time off type at a time.

Create a new time off policy

To create a new time off policy, follow these steps:

Go to Settings.
In the Time off & attendance section, click Time off.
Select the time off type you want to create a policy for.
Click Add policy to open the creation drawer.
Select a template or scroll down and click Plain form to start a policy from scratch
- We don't recommend using other countries' templates, as they might have a calculation logic that doesn't apply to your country.
- If you’re creating a paid holiday policy for Germany or the Netherlands, use the corresponding country-specific template, as it contains special rules for these countries not available otherwise.
Add a policy name and description. While the description is only visible to Administrators, we recommend not adding confidential information to it.
Fill out and review each of the sections in the drawer, described in detail below.
Check the final policy summary and confirm.

If you want to start from an existing policy and tweak some of its settings instead, create a copy of it and edit the duplicate.

General settings

Settings	Description and notes
Valid on	Defines how many days the system deducts from the balance when an employee requests time off: Work Schedule on Mon-Fri: Based on the overlap between work schedule and weekdays. Leave taken on bank holidays and on weekends doesn't impact the balance. Work Schedule on Mon-Sat: Based on the overlap between work schedule and weekdays, including Saturday. Leave taken on bank holidays and on Sundays doesn't impact the balance. Work Schedule, incl. Public Holidays: Based on each employee's individual work schedule. Leave taken on bank holidays impacts the balance. Work Schedule, excl. Bank Holidays: As the previous option, but leave taken on bank holidays does not impact the balance. Mon-Sun: Any requested day, regardless of the employee's work schedule. Leave taken on bank holidays impacts the balance. Only available for daily time off.
Allow half-day requests	Only relevant for time off types measured in days.
Is a certificate required?	Decide if and after how many days off the employee must upload a certificate. The system calculates the duration according to the Valid on setting above and sends a certificate request to the employee. If you enable this setting, you must give your employees propose right to their own Documents section. If your company is located in Germany, your employees with statutory or another non-private type of health insurance do not need to manually upload a certificate. You must retrieve the certificates instead.
Is a substitute required?	Decide if employees must select a substitute for their time off. Not available for types of time off measured in hours. The system doesn't transfer permissions and approval workflows during the substitution. For the latter, delegate time off approvals .
Can a substitute request this time off type simultaneously?	If you set this to No, an approved substitute can’t request this type of time off while substituting. We recommend disabling this option for planned time off, like holiday days, and enabling it for unplanned time off, like sick days.
What kind of entitlement does this policy offer?	With this setting, you establish if the time off policy offers a limited or unlimited amount of time off. If you offer unlimited entitlement, assigned employees can request open-ended time off periods. This is useful if the duration of the leave is uncertain. For example, an employee might need to take extended time off for sick leave, family leave, or public obligations like jury duty.

Granting

The granting section is only relevant if the policy offers limited entitlement. Decide how many days or hours to grant, and when and how to grant them:

Setting	Description
Annual entitlement	The amount of hours/days granted in a year.
Accrual year start	The day when the holiday year starts and the employee starts receiving their entitlement. Carry-over rules apply from this day.
Granting method	How the employee receives the entitlement: For time off in hours, select either to grant all at once, or in monthly installments. For time off in days, select between the following options: yearly, half-yearly, quarterly, and monthly. If you select the monthly option, decide if the employee receives the entitlement at the start of every month, or at the end of every fully worked month. This applies to both time off in days and hours.
Apply temporary granting mode at employment start?	With this option, you may limit the entitlement granted at the start of a new employment. Choose how many months this rule applies for, and how many days or hours to grant during each month. At the end of this period, the standard granting method comes into effect.

Proration

Only relevant if the policy offers limited entitlement. With these settings, you can decide if and how to reduce an employee's entitlement proportionally, based on their working time or when they join or leave in the middle of a cycle. These options are available for both time off in days and hours.

Setting	Description
Proration at the start/end of employment	When an employee joins or leaves the company mid-cycle, you can select to: Not prorate the annual entitlement, granting it in full. Prorate based on the months remaining in the cycle. Prorate based on the days remaining in the cycle. For example: An employee with an annual entitlement of 24 days joins the company on May 10th. You decide to prorate it. With monthly proration, they receive 14 days: (24 days a year / 12 months) x 7 remaining months. With daily proration, they receive 15.35 days: 14 days as above + (2 days a month / 31 days) x 21 remaining days. The rounding rule explained below applies.
Proration for part-time employees	When an employee works a reduced amount of days or hours, you can select to: Not prorate the annual entitlement, granting it in full. Prorate by weekly working days: The system takes into account the number of days employees work in a week against their work schedule’s reference value. Prorate by weekly working hours: The system takes into account the Weekly hours attribute in the employee’s Personal Info tab. The system also prorates according to this rule. For example: An employee works 15 hours over 3 days of the week. You assign them a time off policy with an entitlement of 24 days, and decide to prorate it. With the weekly working days proration, they receive 14,4 days: 24 x 3/5. The rounding rule explained below applies. With the weekly working hours proration, they receive 9 days: 24 x 15/40.
Rounding rule	This applies to yearly granting cycles, when the annual entitlement is not a whole number. The rounding rule doesn't apply to monthly entitlements.

Carryover

Only relevant if the policy offers limited entitlement. Decide if employees can carry any unused entitlement to the following years. If so, you may limit the number of days or hours they can carry over, and set a cutoff period measured in months.

Before changing the carryover settings of an already existing time off policy, read our dedicated article.

Tenure-based rules

Decide if you want to reward tenured employees with permanent extra entitlement. You may select between one-off or recurring rewards:

For one-off rewards, set how many days or hours to reward, and after how many years to reward them. Click Add Rule to add more rewards.
For recurring rewards, set how many days or hours to reward, and the reward frequency, in years.

Assign the time off policy to employees

These instructions apply when you’re assigning a time off policy to employees for the first time. To change a policy assigned to employees instead, follow the steps here.

Before going ahead and assigning a new time off policy to the employees, make sure that you are happy with the time off policy settings. You won't be able to edit it once it has been assigned to the employees.

Automatically assign all time off types that only have one policy

If you haven't assigned any policy to the employee yet, go to their Time off tab and use the Quick assign button. This automatically assigns all time off policies to the employee for any time off types that have only one policy available. This option is particularly useful for assigning policies to new employees.

Assign a policy to a single employee

To assign a time off policy to a single employee, follow these steps:

Go to their employee profile > Time off.
Go to Time off balances on the right.
From either the Assigned or Unassigned tab, click the relevant time off type.
In the time off type window, go to Policies.
Click Assign policy and select the time off policy you’d like to assign.

In Effective from, select one of the options shown in the table below. These options apply for both policies with and without entitlement limitations.

Hire date

The system assigns the new policy retroactively, with effect from the employee's hire date. This may overwrite all previously assigned time off policies.

Specific date

The system assigns the new policy from a specific date of your choosing.

You can select a future date (unlimited).
You can select retroactive dates from the beginning of the previous calendar year. For example, if today is 18/08/25, you can select dates as far back as 1/1/24.

This option allows you to leave a gap between an employee’s hire date and their first policy assignment. Here are some instances where this might be useful:

You add a new time off type, but need to continue using the old one for now. In this case, you don’t want to start from the employee’s hire date, as their history is in the old one.
You’re a new customer and have decided not to transfer your employees’ history from your previous system. In this case, it might suit you to start from a specific date rather than your employees’ hire dates.

Assign the policy.

Assign a policy in bulk

There are two ways to assign a policy to multiple employees at the same time:

Using the People List, recommended in most cases.
Using an import. This option is particularly useful if you need to assign a policy to many employees and time off types. With the import, you can avoid spending time on setting these up individually.

Using the People List

Go to Organization > People list.
Optional: Apply filters to narrow the selection.
Check the box to the left of the relevant employees’ names.
Click Edit time policies > Change time off policy.
Select the relevant time off type and the time off policy you’d like to assign.
In Effective from, note the following:
▶︎ If it’s a policy with unlimited entitlement: You can assign it from the hire date or a specific date.
▶︎ If it’s a policy with limited entitlement: You can assign it from one of the options shown in the table below:

Hire date	The system assigns the new policy retroactively, with effect from the employee's hire date. Assigning a policy from the employee's hire date replaces any previously assigned policy. Existing time off periods will be updated based on the new policy’s settings, and time off balances may be altered.
Start of the current period	The system assigns the new policy from the current period on, starting on the accrual year start specified in the Granting settings.
Next entitlement period	The system assigns the new policy from the next period on, starting on the accrual year start specified in the Granting settings.
Specific date	The system assigns the new policy from a specific date of your choosing. You can select a future date (unlimited). You can select retroactive dates from the beginning of the previous calendar year. For example, if today is 18/08/25, you can select dates as far back as 1/1/24.

Click Change policy to implement the changes.

For time off with entitlement limitations, the vacation time will then be automatically calculated based on the assigned time off policy. The validity date is clearly displayed once you have selected your preferred application option.

Using an import

You perform the import via Settings > Organization > Imports. Learn more in our dedicated article.

Find the answers you need

Create time off policies