What is PTO Accrual?

Ask two companies how PTO works and you'll get two answers: one hands you the whole year's days in January, the other drips them out a bit each pay period. That second model is accrual — paid time off earned over time — and whichever model you run, the thing you actually have to keep is the balance: earned, taken, remaining.

Accrual vs. an annual allowance

The two common ways to grant paid time off are worth telling apart, because they change how the balance moves through the year:

  • Accrual. Time off is earned as you go — a fixed amount each pay period, month, or per hour worked. A new hire starts near zero and builds up; the balance reflects what's been earned so far, minus what's been taken.
  • Annual allowance (lump grant). The full year's balance lands on day one (or on a work anniversary). Simpler to reason about — the balance is just allowance plus any carryover, minus what's taken — which is why many small teams prefer it.

Neither is "correct"; they're policy choices. Accrual limits how much a brand new employee can take before they've earned it; an annual allowance is simpler to run by hand. The tracking need is identical either way: a live picture of earned, taken, and remaining for every person.

How PTO accrual works

An accrual model is built from a few numbers:

  • Accrual rate. How fast time is earned — e.g. 1.25 days a month (15 days a year), or an hourly rate like 0.0385 hours of PTO per hour worked (roughly two weeks a year for full-time).
  • Frequency. When it's added — each pay period, monthly, or per hour on the clock.
  • Carryover (rollover). How much unused balance rolls into the next year — often capped, sometimes "use it or lose it."
  • Accrual cap. A ceiling on the running balance, so it stops growing once someone has banked a lot without taking any.
  • Waiting period. Some plans hold new hires from using accrued time for their first weeks.

The exact rules — rates, caps, carryover, and how they interact with local law — are yours to set to your policy; a tracker records against them, it doesn't decide them.

Why tracking the balance is the hard part

  • Balances drift when leave lives in scattered places. An email here, a text there, a note on a whiteboard — and by mid-year nobody's sure who has how many days left.
  • Pending requests hide the true number. Someone with three trips booked but none taken can look fully stocked. A balance that holds back pending requests stops you from double-booking a year.
  • Overlaps become coverage problems. The day two people are off at once and a shift runs short isn't a balance question — it's a coverage question, and it's easy to miss until it lands.

A workbook that logs each absence once and keeps the balance — allowance or accrued, minus taken and pending — turns "I think she has a few days left" into a number you can act on.

How to track PTO by hand

  1. Set each person's starting point. An annual allowance (plus carryover), or an accrual rate if you earn as you go.
  2. Log every absence in one place — person, leave type, dates — so nothing lives only in an inbox.
  3. Separate what draws down PTO from what doesn't. Vacation and personal days come out of the balance; sick, unpaid, and holidays are recorded but not deducted.
  4. Read the remaining balance — available minus taken minus pending — before you approve the next request.
  5. Watch coverage, not just balances. A day-by-day calendar shows when too many people are off at once, so you catch the clash early.

Related templates and concepts

Tracking PTO sits right next to the other things a small team keeps by hand:

Templates that implement this

3 templates

Log every absence once and see each person's balance — available, approved, pending, and remaining — plus a team calendar that flags coverage clashes. One owned spreadsheet.

Further reading

How PTO and coverage fit alongside onboarding, key-person risk, and planning a small team.