When you have a salary and you take PTO, here’s what happens:
- Once your PTO starts, don’t show up to work. If you’re working remotely, don’t turn on your work computer.
- During PTO, you don’t have to respond to email or keep working on projects. You get to ignore work.
- Once your PTO ends, you go back to work.
- On your next paycheck, you get paid the same amount. There aren’t any deductions for taking that time off.
That’s the simple answer. But things can get a lot murkier in practice. I’m going to break down all the nitty gritty details so you know exactly how PTO works in your new salary job.
How Salaried PTO is Different from Hourly PTO
Hourly PTO only pays you while you’re working. Salaried PTO pays you even while you’re not working.
Hourly gigs start with the assumption that if you’re not working, you’re not earning anything. You clock in and work, you get paid. You don’t clock in, you don’t get paid. The main exception is sick leave, most states have mandatory paid sick time for hourly folks, like 1 hour of sick time for every 20-40 hours worked. But if there isn’t a company policy or state/federal regulation requiring payment when not working, you’re not going to get paid.
Salaried PTO is the exact opposite. Unless a policy states otherwise, you’re getting paid the same amount every pay period. And salary deductions are pretty rare.
You get to count on your paycheck being the same amount every time. Even if you take some time off to go to the dentist, recover from an illness, or take a vacation.
With salaried PTO, you can assume that you’ll be paid even when you’re not working.
How Much PTO Do You Get on a Salary?
In the United States, you’ll typically get 2-3 weeks of PTO every year. I’d say 3 weeks is pretty standard and 2 weeks is on the low end.
If you get a job offer and it includes more than 3 weeks in PTO, count your lucky stars. It’s definitely not typical.
When evaluating whether or not your time off is better than average, I would look at the total days off per year. That includes all the PTO and company holidays.
Over my career, I’ve noticed that PTO isn’t 100% rest and relaxation. No matter how good the company culture is. Whenever I take a vacation, there’s a mad dash to wrap things up while I’m gone and prep everything so nothing gets held up while I’m out. Then I usually keep at least one eye on my inbox just in case there’s a huge fire. I should have better self control but let’s be honest, most of us will still keep an eye on things. Then there’s the catch-up period when I get back, trying to clear the backlog that’s waiting for me.
None of this happens during company holidays. Everyone stops working and it’s a ghost town. No emails, no fires, nothing. After a few days of this, I find myself letting go and truly start to relax. I bet a lot of folks have a similar experience.
My point is that company holidays can be more valuable than PTO. When we have discussions about increasing PTO, I usually look for ways to add more company holidays instead. I know folks will get even more rest that way.
So while an extra week of PTO is amazing, I’d look at the total number of company holidays too when deciding how good your benefits package is.
Every Company Has a Different PTO System
There tend to be three main types of PTO systems:
In this system, you accrue PTO over time. Every pay period, you earn PTO hours. This is the system that we use.
When you first start your salaried job, you have a PTO balance of zero. You haven’t earned any PTO so you can’t use any.
Then on your first pay stub, you see that you’ve earned 5 hours of PTO. You can now use those hours however you like in the future.
You can submit a few hours of PTO to cover the time you need for a personal appointment. Or you can submit a request of 8 hours to take the entire day off. And 40 hours gets you the entire week.
Accrue hours on every pay cycle, then spend those hours to take time off.
Lump Sum PTO
Lump sum is just like it sounds: you get a batch of PTO all at once. Then you use it however you like.
A common setup is that every salaried employee gets 3 weeks (15 days) of vacation on January 1 each year. You then have until the end of the year to use it. Some companies will let you carry unused PTO into the next year. In which case, the next batch of 15 days stacks on top of whatever you still have from the previous year. Other companies have a use-it or lose-it policy. So any left-over PTO gets set to zero on December 31, and then you go back to 15 days for the following year.
There’s endless tweaks and differences that companies can choose but the important thing to remember is that you get a batch of PTO all at once that you can use later.
First, I have a personal hatred for unlimited PTO. But how does it work?
Short story: it’s super fuzzy. It’s a non-policy policy.
If that sounds confusing, that’s because it is.
With most unlimited PTO policies, you can take time off whenever you like and you can take as much time off as you like. At least that’s the official policy.
But that’s as much guidance as you typically get. You’ll have to figure out all the details on your own. For example, how much is too much? We’re adults, we all know that there’s a limit to everything. No one can start a new job and then immediately take 12 months off. So what’s the actual limit?
Hopefully you have a capable manager that can help you figure out how your unlimited PTO works in practice. Because there aren’t any real standards. Every company, department, and team will be different. Some managers will be lax and encourage you to take a ton of time off. Others will hold it against you if you take more than 2 weeks off.
My only advice is to talk with your manager, ask what their expectations are, and hope you’re working for someone that’s reasonable.
Time Off Boundaries Can Be Blurry
This is one of the potential downsides of salaried PTO.
Boundaries can get SUPER blurry.
And it’s completely dependent on the work culture of your company.
In some jobs, you’ll put in PTO and your boss will even help shield you from requests during that time. You’ll feel like PTO is respected and prioritized.
In other jobs, you’ll feel like you’re on call 24/7/365. Sick days, holidays, vacation without cell service, none of it matters. Fires pop up constantly and you’ll feel pressure to respond instantly. If it’s bad enough, it can be downright toxic.
At one of the companies I worked at, a fellow executive had someone on their team take a vacation on a remote caribbean cruise. So cell service was going to be spotty. The executive demanded that the employee get a satellite phone and check in at least once every 24 hours. No one else found out about this crazy demand until after the executive was no longer working there.
Law firms are another example of how blurry boundaries can create a toxic environment.
When a new lawyer joins a law firm after finishing law school and passing their State Bar Exam (the certification so they can practice law), they start as an Associate at the firm. Like a typical salaried job, Associates get an annual salary and a benefits package that includes healthcare. Many law firms will say you can take time off whenever you like.
There’s a catch.
They also require associates to hit 2100 billable hours per year. These are hours that can be billed to clients. That’s 40.4 billable hours per week.
Anyone that’s done firm work knows that it’s really hard to bill a perfect 40 hour week on any week. You also have to account for:
- Admin stuff that can’t be billed.
- Time coordinating with your practice group, much of which can’t be billed.
- Time spent on firm-wide stuff. Again, can’t be billed.
- Many billable hours get “written off” because a Partner decides to lower a client bill, work gets messed up, or a client pushes back on the bill. These hours don’t count.
- Sick time, holidays, vacation, etc.
The senior Partners at the firm don’t care about any of that, all they care about is that you hit 2100 billable hours per year. Period. That gives you two choices:
- Steamline everything as much as possible and never take time off. If you’re really good, hopefully you can keep your work weeks to 45-50 hours. But that means you never take time off. Even during Christmas. That also means every day is a work blitz. You have to be actively working and billing for 8 hours straight. No breaks. No downtime.
- Try to take a few weeks off each year and make that lost time up. Now you’re working at least 50-60 hours per week. The hours need to come from somewhere.
Can you take time off whenever you want? Yes.
Does any Associate feel like they can take real time off without being punished later? Not a chance.
Across industries, there are plenty of toxic work environments out there where you will feel pressured to never take time off. The worst part is that it’s really hard to tell from the outside. Every company will say that it has a great work-life balance and salaried employees can take PTO as they please. You won’t really know until you’ve been working there for a few months.
Here’s a few good signs of a healthy PTO culture:
- Ask your potential manager and teammates when they last took time off, there should be a number of recent examples. If everyone says things like “maybe a week last year, I don’t quite remember,” that’s a bad sign.
- You can also ask team mates if their boss has ever pushed them to take off. Great managers will know that many folks have a bad habit of not taking vacation even when they can, they’ll nudge them to get the rest they need.
- Ask people if they feel like they can truly disconnect when they’re on PTO. If you hear about how people feel like they need to keep one eye on their inbox, it could be a sign of a larger problem.
Just remember that there’s a huge variance in how companies treat salaried PTO boundaries. Some of them respect your PTO time. And some definitely do not.
How Salaried PTO Works With Sick Time and Other Types of Leave
The real answer: it’s different at every company and you’ll need to look at your company’s policies.
Older companies tend to carve out policies for every type of time off. You get vacation days, paid holidays, personal days, sick days, bereavement days, jury duty days, etc. Everything is a different bucket with different rules on how it’s gained, approved, and used.
Younger companies tend to gravitate towards this structure:
- All personal time is lumped into a single “PTO” bucket. This includes vacation, sick time, and personal days. If you want to take time off for yourself for any reason, use your PTO time. No one cares why you’ll be out of office or what you’ll be doing.
- Company-wide vacation days that aren’t counted as PTO. Everyone gets the time off and PTO balances aren’t used on that day. There’s usually a list of company holidays posted somewhere and everyone just takes the day off on those days.
- Separate policies for rarer events like bereavement, parental leave, and jury duty. Each of these situations needs a completely unique policy in order to give employees the support they need.
But keep in mind that “PTO” can have completely different meanings at different companies.
Can You Use PTO Alongside Other Types of Leave?
This is completely dependent on the policies at your company. And your manager.
For me, I always tell our employees to use PTO however they like.
So if someone has been out on Jury Duty, is completely exhausted, and wants to take a bunch of PTO right after, go for it. For me, PTO is their time and they can stack it alongside any other time off.
We also have a Winter Break where we take two weeks off during the holidays. Some folks at our company will stack PTO on top of it, giving them a block of 3-4 weeks off.
Again, check your policies and ask your manager. Even if there isn’t a policy against it, your manager might frown upon it. If they’re strict enough, they could hold it against you. That won’t be fair but it does happen.
Tips and Tricks for Getting the Most out of Your PTO
There’s a few hack and tips that I’d recommend to anyone with a PTO balance:
- Keep about 40 hours (one week) in reserve. Occasionally, crazy stuff happens. Car accidents, a close friend or loved one having a mental health crisis, a surprise injury or severe medical diagnosis, divorce. Even at a small company, these types of events happen pretty regularly. Being able to take an entire week off at a moment’s notice can be a godsend. And you don’t want to be beholden to your manager to approve more PTO time than you technically have. Some companies let folks go into a negative PTO balance but a lot don’t.
- Stack PTO with other time off. The easiest way to stretch your vacation time is to put in PTO alongside other time off policies, like company holidays. The classic trick is to put in a week of PTO around the December holidays. If your company takes a week off for Christmas, that gives you a two week vacation while only having to use one week worth of PTO. Stacking PTO on top of Memorial Day, Labor Day, 4th of July, and Thanksgiving are also popular. We even encourage folks to use PTO alongside bereavement, parental leave, or any other time off. It’s their time after all. Just check your company policies to make sure there aren’t any issues with this.
- Bank PTO if you know you’re going to leave. In most cases, you’ll be paid for any unused PTO on your final paycheck. Instead of taking time off in the last few months of your job, you’ll get more value if you bank as many PTO hours as possible. Then take 2-3 weeks off before you start your next job. The extra cash in your last paycheck will help cover expenses while you’re not working and you’ll be able to truly disengage since there won’t be any work at all. You’ll get more rest out of that period than you would by taking a week off in your last month at work. Plus, work tends to slow down once you give notice. No need to use PTO while things are winding down.
- Instead of using PTO for personal appointments, shift your work hours. For this one, you’ll need a compassionate and reasonable company. If your company tracks your computer time or something like that, you might not have this option. For our team, I tell them that I don’t care what hours they work. So if someone has a doctor’s appointment in the afternoon and wants to work a bit in the evening to avoid taking PTO for 1-2 hours, I’m totally fine with that. We’ve even had people work over the weekends and take time off during the week because that worked better for their schedule. If you’re able to do this, you can keep more of your PTO for vacation and emergencies.