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A Step-By-Step Guide To Building An Unlimited PTO Policy That Works

A Step-By-Step Guide To Building An Unlimited PTO Policy That Works

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Summary

  • Unlimited PTO works best when guidelines are clear and approvals are consistent
  • Employees often take less time off under unlimited PTO, so setting minimums is important
  • Manager training and tracking tools help maintain visibility and fairness
  • Ongoing reviews and employee feedback keep the policy effective over time

Last updated on July 10, 2025

Frequently asked questions

An unlimited PTO policy allows employees to take paid time off as needed, without a fixed number of vacation days. Instead of accruing time, employees request leave based on personal needs and workload, and managers approve requests based on business needs and team coverage. 

Unlimited PTO typically reduces financial liability by eliminating the need to pay out unused vacation days when employees leave the company. 

Knowledge-based industries like technology, marketing, and professional services tend to see the greatest success with unlimited PTO due to their results-focused work environments. 

Companies can transition by addressing existing PTO balances (either paying them out or allowing a grace period for use), providing clear guidelines, and implementing a phased rollout with regular feedback collection. 

Managers can prevent favoritism by using standardized approval criteria, documenting decisions, and regularly reviewing time-off patterns across team members to ensure equitable access.