Time Off Feature

Time off is a period of time where employees are not working. Employers offer time off as a type of perk that allows employees to take a break from work to travel, rest, take care of personal tasks, etc. Employers can offer a combination of paid or unpaid time off and set different policies/rules for different groups of employees. Common examples of time off are Vacation, Sick, Holiday, and Bereavement.

There are two types of time off:

Paid Time Off		Unpaid time Off
As the name implies, employees that are on a paid time off policy will receive compensation for time they take off. Employers track the hours of time off taken and input that information during the run payroll flow. The paid time off compensation is calculated and added as earnings to the employee’s pay stub. Paid time off is taxed like any other regular compensation received by the employee and is reported as part of the gross earnings on the employee’s W-2 at year end.		Employees that are on unpaid time off do not receive any compensation for the days off they take. Employers might still set policies and rules to track how much time off an employee is allowed, how much has been used, and how much is remaining. Time off hours are recorded during the payroll run and are reflected on the pay stub for record keeping only. No additional compensations are added to the employee’s wages in this case.

Manage Company Time Off Settings Closed

Set up your company’s time off rules. Choose how workers earn time off, when it renews, and how many hours they can carry over. Follow these steps to add or edit a time off type:

Go to Financials > Generate Payroll and click the Access Payroll Details button.
The Payroll Details panel opens. Find the Time off section and click the Edit button.
Click the Add time off button.
Select the type of time off you would like to create — Paid Time Off, Sick Pay, or Unpaid Leave. If you want to add a different type of time off, select one of the options and edit the Name of the policy in the next step.
Set company default values is automatically selected. You can only change this option if you have given your time off policy a custom name.
Choose how time off hours are accrued:
1. Fixed amount each year: Using this accrual method, an employee earns all their time off on a specific date, like at the beginning of the year or on their hire date. When choosing this accrual method, you are then asked to choose when the worker will accrue hours:
  - At the start of the calendar year: Employees earn the total amount of allotted time off hours starting January 1 of each new year.
  - On the anniversary of the worker's hire date: Employees earn the total amount of allotted time off hours on their work anniversaries per the hire date entered into their worker profiles.
  - Per pay period: Employees earn time off hours each pay period until they reach the total number of hours allotted in the policy.
  You are then asked to choose how the worker will accrue hours:
  - Total hours per year/Accrual rate: The total hours of time off accrued each year/on the worker's anniversary.
  - Max carry over hours: A maximum number of hours a worker can carry over to the next year.
  - Max hours allowed: A maximum number of hours a worker can accrue for this time off type.
2. Manual: This is not common, but allows an employer that has a very custom method or is tracking accruals using a different tool to manually enter the accrued hours for each employee manually by adding their time off balance.
3. Based on hours worked: Using this accrual method, an employee earns time off hours based on how many hours they work. When choosing this accrual method, you are then asked to choose how the worker will accrue hours:
  - Accrual rate: The number of hours accrued for hours worked.
  - Per hours worked: The number of hours worked to be used when calculating the accrual.
  - Max hours accrued per year: An annual max to stop accruing hours until the next accrual period.
  - Max hours allowed: A maximum number of hours a worker can accrue for this time off type.
  - Max carry over hours: A maximum number of hours a worker can carry over to the next year.
4. No accrual: This is used for employers that have an unlimited time off policy. No hours of time off are accrued.
Click the Save button.

The time off policy now appears in the Time off section of the Payroll Details panel.

Create Multiple Versions of a Time Off Policy Closed

When you add time off for the first time, you’re also setting up a default policy. Some companies need more than one policy. For example, new employees might earn 2 weeks off per year, while long-term employees earn 4 weeks. Follow these steps to add alternate versions of your time off policies:

Go to Financials > Generate Payroll and click the Access Payroll Details button.
The Payroll Details panel opens. Find the Time off section and click the Edit button.
Find the time off policy you want to add to and click Edit.
Click on + Add a policy.
Enter a display name to help you recognize the policy later. This name is only visible to the company admins and will not be shown on worker pay stubs.
Select the accrual method and any other configuration settings.
Click Save.

Assign Time Off Policy to an Employee Closed

Once you have a time off policy created, you can assign it to an Employee. The Employee must be onboarded for payroll before you can assign a time off policy.

To assign a time off policy to an Employee:

Go to Employees > Current Employees and open the Employee Profile.
Click on the Payroll tab and select the Access Payroll Details button.
The Payroll Details panel opens. Find the Time off section and click Edit.
Click the Add time off button.
Select the Time off type and Time off policy from the dropdowns. If applicable, click the pencil icon to add hours to the Employee's current time off balance.
Click Save.

The time off policy now appears in the Time off section of the Employee's Payroll Details panel.