1. CORE Help Center
  2. Using CORE
  3. Payroll
  4. CORE Payroll

Payroll-PTO Policies

Updated

You can create and manage Paid Time Off (PTO) policies for your company to track and automate employee leave for vacation, sick time. PTO policies define how much leave employees are entitled to, how it accrues, and how unused hours are carried over or paid out. After the policies are created, they can be assigned to employees to ensure accurate time-off calculations during payroll.

Field Descriptions

How To

Create and Manage PTO Policies

Update PTO Balances

Field Descriptions

Field Name Field Description
Payroll > PTO Policies > New Paid Time Off Policy
Limit the number of PTO hours an employee can take per year You can set a maximum number of PTO hours that employees are allowed to use annually. Employees who do not use their full allocation will be compensated for unused days in their final paycheck. If no limit is set, no payout will be made for unused PTO upon termination.

Accrual Method:

Fixed PTO hours amount each year

Employees are allocated a predetermined and fixed number of Paid Time Off (PTO) hours each year. This means that every employee is granted a specific amount of time away from work, which they can use for vacation, personal matters, or illness. The total number of PTO hours is set in advance and does not typically change throughout the year, providing employees with a clear understanding of the amount of paid leave they are entitled to annually. 

  • Max time off balance: Specifies the maximum PTO balance an employee can accumulate under a Fixed PTO per year policy. When the employee’s accrued balance reaches this limit, additional PTO accruals stop until the balance falls below the defined maximum.
Accrue based on Hours Paid Time Off (PTO) accrual is calculated according to the total number of hours an employee works. This means that the more hours an individual works, the more PTO they accumulate over time. Instead of receiving a fixed amount of PTO regardless of hours worked, this method ensures that PTO accrual is directly proportional to actual hours logged, providing a fair and transparent way to earn time off.
Throughout the year at each pay period Paid Time Off (PTO) is earned gradually and accumulates incrementally with every pay period. This means that instead of receiving a lump sum of PTO all at once, employees gain a small portion of their total PTO entitlement during each pay cycle throughout the year. This approach ensures a steady and consistent accrual of leave time, allowing employees to build up their available PTO progressively as they continue their employment.
Set limit of carryover of unused hours You can establish a maximum limit on the number of unused Paid Time Off (PTO) hours that employees are allowed to carry over into the next accrual period. This means that if an employee has more unused PTO hours than the specified carryover limit at the end of the current period, the excess hours will not be transferred forward. Instead, those additional hours above the limit will be deducted from the employee's PTO balance during the processing of the final payroll before the new accrual period begins. This helps to manage PTO balances effectively and encourages employees to use their allotted time off within a reasonable timeframe.
Employees should be paid out on dismissal if... This setting can be used if your organization intends to compensate employees for any unused PTO balance in their final paycheck following termination. It is important to note that in many jurisdictions, state laws require employers to pay out accrued but unused PTO upon dismissal. Therefore, adhering to this practice not only supports fair treatment of employees but also helps ensure compliance with applicable legal requirements.
Payroll > PTO Policies > Policy Details > Enrolled Employees
Employee PTO Activities This provides a clear, date-based log of all events that affect an employee’s PTO balance. The Activity Log lists each event, such as policy assignments, manual adjustments, payroll adjustments, and system-generated changes, along with the event type, description, resulting balance and balance change. This view helps companies review how an employee’s PTO balance has evolved over time and ensures full transparency for all PTO-related actions. This log is read-only. 

Create and Manage PTO Policies

To create a policy, watch this video or follow these steps:

  1. Open the PTO Policies screen from the side menu > Payroll.

  2. On the screen, click Create Policy to add a new PTO policy.
  3. Enter a Policy Name that clearly identifies the type of leave (e.g., Vacation Policy or Sick Policy).

  4. Select a Policy Type; you can choose between Vacation or Sick Time.
  5. Enable Limit the number of PTO hours an employee can take per year if you want to set a maximum annual PTO.
  6. Choose an Accrual Method:
    • Fixed PTO hours amount each year 
    • Accrue based on hours
    • Throughout the year at each pay period
  7. Next, enter the total available PTO hours per year.
  8. Choose when PTO balances reset under Reset hours annually:
    • January 1st: PTO resets for all employees at the calendar year's start. (all this is missing from FD and needs to be a separate help topic)
    • Employee anniversary: PTO resets on each employee’s hire date anniversary.
  9. Select Set a limit for carryover of unused hours to restrict how much unused PTO rolls over to the next period.
  10. Enable Employees should be paid out on dismissal if they have an unused balance. If an employee has accrued benefits, such as paid time off or other entitlements, that have not been utilized by the time their employment ends, they should receive payment for those remaining balances. This ensures fair treatment and proper settlement of all owed amounts when an employee leaves the company.
  11. Click Create Policy to save your PTO policy.
  12. In the PTO Policies list, click Open to view detailed information for a specific policy. Click Meatball menu.png to edit the policy. You can also deactivate the policy from the Policy Details screen if needed. 

Your new PTO policy will appear in the list, showing the name, type, and the number of employees enrolled. You can edit or delete policies as needed.

Update PTO Balances

To update the PTO balances, watch this video or follow these steps:

  1. Open the PTO Policies screen from the side menu > Payroll.

  2. In the PTO Policies list, click Open on the row to view detailed information for a specific policy.

    Next, on the Enrolled Employees tab, click Meatball menu.png next to the employee whose PTO balance you want to update and select Adjust PTO Balance.

    On the PTO Balance Adjustments dialog, enter the adjustment amount and click Modify PTO Balance. The updated balance appears immediately in the Balance (Hours) column for that employee.

Related articles