PTO (Paid Time Off)
Also known as: paid time off, PTO bank
PTO (paid time off) is a pooled bank of paid days employees can use for any reason — holiday, sick, or personal — without separate categories.
PTO, or paid time off, is a bank of paid leave that employees can use for any purpose: vacation, illness, appointments, or personal matters. Instead of separate allowances for holiday and sick leave, a PTO policy combines them into a single pool the employee draws down.
PTO is common in the United States. The advantage is flexibility and simplicity; the trade-off is that employees may come to work sick to preserve days for holidays, and unused balances can become a payroll liability.
PTO vs. traditional leave
A traditional model splits entitlement into named types — annual leave, sick leave, personal days — each with its own rules. A PTO model pools them. Many teams run a hybrid: a flexible PTO bank for holidays and personal time, plus separate, often uncapped, sick leave.
Related terms
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