Create time off policies – Personio

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. 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.

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 > Time off & Attendance > Time off.
Select the time off type you want to create a policy for.
Click Add policy to open the creation drawer.
Fill out 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, create a copy of it and edit the duplicate.

General settings

Settings	Description and notes
Valid on	Decide how the system calculates time off days when an employee requests time off: Work Schedule on Mon-Fri, or Mon-Sat: Based on the overlap between the work schedule and the selected option. Leave taken on public holidays does not count time off days. Work schedule, incl. Public Holidays: Based on each employee's individual work schedule. Leave taken on public holidays counts as time off days. Work schedule, excl. Public Holidays: As the previous option, but leave taken on public holidays does not count as time off days. Mon-Sun: Any requested day, regardless of the employee's work schedule. Leave taken on public holidays counts as time off days. 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 time off days the employee must upload a certificate. The system calculates the duration according to the Valid on setting above. 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. The system doesn't transfer access rights and approval workflows during the substitution. For the latter, delegate time off approvals .
Can a substitute request this time off type simultaneously?	If you disable the option, 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.
Does this policy require any entitlement limitations?	Choose yes if you need to limit the amount of days or hours employees can request in a cycle. For example, you can set an entitlement limit for paid vacations, so employees can take only up to a specific amount of days per year. If you choose yes, you can select country specific entitlement rules. With these, you can: Access exclusive recommended settings. See country-specific recommendations during the policy creation.

Granting

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, choose either to grant all at once, or in monthly installments. For time off in days, choose between the following options: yearly, half-yearly, quarterly, and monthly. If you choose 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

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 choose 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 choose 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 tenure-based extra entitlement 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

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 choose 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. Click Add end-point to stop the rewards after a certain number of years.

If you have set the accrual year to start on a date other than the employee’s anniversary, set a reward granting moment.

You can choose to either grant the reward on the accrual year start after the employee’s work anniversary, or on the anniversary day. If you select the latter, you may prorate the reward in the first year of granting, based on the anniversary date.

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.

To assign a time off policy to a single employee, go to their profile and click Time off > Unassigned > relevant time off type > Change policy.

To assign the time off policy to several employees at once, follow these steps:

Go to People list.
Select all the employees you want to assign the time off policy to and click Edit time policies > Change time off policy.
Select the relevant time off type and the time off policy you would like to assign.
In Applicable from, select one of the following options:

Hire date

The new policy is assigned retroactively, with effect from the employee's hire date. All previously assigned time off policies are overwritten.

When assigning a time off policy to an employee for the very first time, this is the only option you can select.

Start of the current period

The new policy is assigned from the current period on, starting on the accrual year start specified in the Granting settings.

Next entitlement period

The new policy is assigned from the next period on, starting on the accrual year start specified in the Granting settings.

Click Update 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.
Optional: To display a historical overview of all assigned time off policies, click the Policies tab.

What can we help you with?