HR Glossary
Paid time off (PTO)

Paid time off (PTO)

Updated on:
August 22, 2022


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What is paid time off (PTO)?

Paid time off (PTO) refers to compensated time away from work, provided by an employer to employees for them to use as they see fit. PTO is often measured in hours and classified for different types of absences like sickness, vacation time, and personal time.

PTO generally applies to most industries. Many employers provide PTO to their employees based on contractual stipulations or employment terms.

The amount of PTO an employer provides to its employees is typically based on the length of employment (e.g., 24 hours per year). Some employers offer PTO to their employees along with paid holidays. Some employers pay employees PTO in lieu of overtime pay.

Paid time off is necessary for a number of reasons. First, it allows employees to take the time they need to rest and recover from illness or injury. This is important not only for the employee's health, but also for the health of the workplace as a whole. Second, paid time off provides employees with the opportunity to take care of personal business or pursue personal interests outside of work. This can lead to a more well-rounded and productive employee. Finally, paid time off allows employees to spend time with family and friends, which can help reduce stress and improve morale.

what is the difference between personal time off and paid time off?


The difference between paid time off and PTO is that you may have personal time off from your job, but you cannot get paid time off (sometimes called vacation pay, paid time off, or sick pay).

The laws about personal time off vary between states and countries, but in most jurisdictions, your employer cannot require you to use personal time off for any type of compensation.

Instead, your employer gives you the time off because your company values the time off and considers it a benefit to you.