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Set up accrual settings in your time off policies

Set PTO accruals by length of employment or hours worked. Define rates, milestones, waiting periods, and caps to manage balances.

Updated over a month ago

When setting up your time off policies, you can choose one of two accrual methods: based on length of employment or based on hours worked.

Here are the steps that define what each option means.

Based on length of employment

Employees will earn time off over time, depending on how long they've worked with the company.

When you select Based on length of employment for the accrual method, Workstream will let you set a fixed number of hours that employees will earn per accrual period, such as 4 hours off per month or any other defined period.

Setting up a PTO policy with an accrual method that's based on employment duration

Here's how you can set it up:

  1. How do you want to distribute time off?

    Choose how you want employees to earn and receive their PTO each period. This setting helps determine the start date for accruing PTO, along with how and when it will be distributed.

  2. Hours per accrual period

    Enter the number of hours employees will earn during each accrual period. For example, you might set it to 4 hours per month. This works hand-in-hand with the accrual method (whether based on employment duration or fixed hours per period) to decide how much time off employees can earn during a specific period.

  3. Accrual maximum

    Set the maximum number of PTO hours an employee can accumulate. This ensures employees don’t accrue more time off than allowed by your policy.

  4. (Optional) ⊕ Add new milestone

    If your company has varying accrual rates based on the number of years an employee has worked, you can create multiple milestones. For example, after 1 year, employees could earn a higher accrual rate (e.g., 5 hours/month), and after 5 years, they could earn even more. This helps tailor your PTO policies to reward long-term employees with more time off. For each milestone, you'll need to specify:

    • Hours per accrual period: Enter how many hours employees will earn once they reach this milestone

    • Years worked at the company: Specify the number of years an employee must work to reach this milestone

    • Accrual maximum: Define the maximum amount of PTO an employee can accumulate at this milestone

    Adding milestones

  5. Waiting period

    Decide if employees should start earning time off immediately or after a certain waiting period. If you choose "No", enter the number of days for the waiting period (for example, 30 days).

    Note: Employees will not start accruing PTO until the waiting period ends. Afterward, the selected earning method (front-load or back-load) will determine when PTO is added to their balance.

  6. Earning method

    These methods directly affect how and when employees see their PTO balance updated:

    • Front-load: The entire PTO balance is added at the start of the accrual period. If there’s a waiting period, it will be added once the period ends

    • Back-load: The PTO balance is added at the end of the accrual period. If there’s a waiting period, it will be added at the end of the first accrual period after the waiting period ends

  7. Can employees accrue time for partially employed periods?

    Choose whether employees can earn PTO during periods when they aren’t fully employed for the entire accrual period (for example, when an employee starts or ends mid-period).

    • Yes, employees can accrue time for partially employed periods: Employees will accrue PTO for the time they were actively employed, even if they started or ended mid-period

    • No, employees can only accrue time for fully employed periods: Employees must be fully employed during the entire accrual period to earn PTO. Partial periods will not count toward accrual

  8. Proceed to the next step

    Select Next in the upper-right corner to proceed to the next step.

Based on hours worked

The number of hours (for example, 1 hour per week or 12 hours per year) determines how much time off an employee can earn in each set period (week, month, or year).

When you select Based on hours worked for the accrual method, employees will earn PTO based on the number of hours they work. For example, they might earn 1 hour of PTO for every 20 hours worked.

Based on hours worked

Here's how you can set it up:

  1. Work types that add to time off balance in each payroll run

    Choose the work types that will contribute to the employee’s PTO balance. These work types will be used to calculate the hours worked that contribute to the employee's PTO balance. By default, the following work types are selected: Hourly, Overtime, and Double overtime.

  2. What is the accrual rate?

    Enter how many hours of PTO employees will earn for a specific number of hours worked. For example, you might set it to 1 hour of PTO for every 20 hours worked. This is how you define the rate at which employees accrue time off based on their actual work hours. So, if an employee works 40 hours in a week, with this accrual rate, they would earn 2 hours of PTO for that week (1 hour for every 20 hours worked).

  3. Accrual maximum

    Set the maximum number of PTO hours an employee can accumulate under this accrual method. For example, you might set a cap of 200 hours to limit how much time off employees can earn. Once they reach the maximum, no further PTO will be accrued until they use some of their time off.

  4. (Optional) ⊕ Add new milestone

    If your company has varying accrual rates based on the number of years an employee has worked, you can create multiple milestones. For example, after 1 year, employees could earn a higher accrual rate (e.g., 5 hours/month), and after 5 years, they could earn even more. This helps tailor your PTO policies to reward long-term employees with more time off. For each milestone, you'll need to specify:

    • What is the accrual rate: Enter the number of hours of PTO employees will earn for a specific number of hours worked, based on this milestone

    • Years worked at the company: Specify the number of years an employee must work to reach this milestone

    • Accrual maximum: Define the maximum amount of PTO an employee can accumulate at this milestone

    Adding milestones for acrrual method based on hours worked

  5. Waiting period

    Decide whether employees should start earning time off immediately or after a certain waiting period. If you choose "No", enter the number of days for the waiting period (for example, 30 days). This is useful if you want employees to complete a probationary period before starting to accrue PTO.

    The waiting period works with the accrual method to determine when employees begin to earn time off based on the hours they work. Once the waiting period ends, the employee will start accruing PTO according to the defined accrual rate (for example, 1 hour of PTO for every 20 hours worked).

  6. Proceed to the next step

    Select Next in the upper-right corner to proceed to the next step.

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