Setting up allowances

Allowance is the amount of leave an employee can use during the company year.

Some companies call this:

• holiday allowance
• annual leave allowance
• vacation allowance
• PTO allowance
• paid time off

In TimeOff.Management, you can keep allowance simple or build a more detailed setup.

Most companies start with a department allowance. Then they add individual overrides, accrual schedules, or leave type limits when needed.

This guide explains the main allowance options and links to the detailed articles for each setup.

Main ways to set allowance

How allowance works

TimeOff.Management checks allowance in this order:

1. Employee setup If an employee has an individual allowance or accrual schedule, this replaces the department allowance.

2. Department setup If there is no employee override, the employee follows the allowance set for their department.

3. Leave type setup The leave type decides whether a booking deducts from allowance, adds to allowance, or has no effect.

4. Schedule and working pattern The employee schedule helps calculate how much allowance is deducted for each booking.

This means allowance is not controlled by one setting only.

It can depend on the department, employee settings, leave types, schedules, and company policies.

Before you set up allowance

Before changing allowance, check these settings first.

Company year

Your company year controls when annual allowance starts and resets.

If your leave year does not start in January, update the year start month in General Settings.

Read more: How to change the start of your business year

Employee schedules

Schedules help TimeOff.Management calculate how much leave should be deducted.

For example, if an employee works four days a week and books a full week off, the system should deduct four working days, not five.

Read more: Setting employee schedule

For shift workers or repeating work patterns, use rotas.

Read more: Setting employee rotas

Partial leave

If employees can book mornings, afternoons, or hours, check your partial leave settings.

Read more: Allow partial leave

Leave types

Leave types control how each booking affects allowance.

A leave type can:

• deduct from allowance
• add to allowance
• have no effect on allowance
• have its own yearly limit

Read more: Leave types

1. Set allowance from department

Department allowance is the easiest way to manage PTO or holiday allowance.

Each department has its own allowance. All employees in that department follow the same allowance rule.

This is best when most employees in a team have the same entitlement.

For example:

• full-time employees get 25 days
• part-time employees are placed in a separate department with a different allowance
• contractors are placed in a department with no paid holiday allowance

To assign allowance for a department:

1. Go to Departments.
2. Select the department.
3. Enter Edit Mode.
4. Add or update the allowance.
5. Save the changes.

This gives everyone in that department the same standard allowance.

Read more: Managing departments

2. Override department allowance for one employee

Use an employee override when one person needs a different allowance from their department.

This replaces the department allowance for that employee.

You can use this for:

• part-time employees
• custom contracts
• new starters
• employees with special agreements
• employees who should use an accrual schedule

Go to:

Employees → Select employee → Employee Details → Allowance tab

Then enter Edit Mode.

From here, you can set an individual allowance or add an accrual schedule.

3. Use individual allowance for a fixed yearly amount

Individual allowance is front-loaded.

This means the employee gets a fixed number of days from the start of their allowance year.

Use this when the employee should have a simple custom amount.

For example:

• the department allowance is 25 days
• one employee should receive 20 days
• another employee should receive 28 days

Individual allowance is simple and quick to manage.

Read more: Setting up individual allowances

4. Use an accrual schedule when leave is earned over time

Use an accrual schedule when employees earn leave during the year.

Instead of giving all days at the start of the year, allowance is added gradually.

This is useful when employees earn leave:

• monthly
• quarterly
• after each work period
• across a fixed contract period
• during part of the company year

Accrual schedules are managed in Policies.

Go to:

Policies → Accrued Allowance Schedule

You can add the employee to an existing policy or create a new one.

Read more: Employee policies - Accrued Allowance Schedule

5. Add allowance based on length of service

Some companies give employees more leave after they have worked for the company for a certain time.

For example:

• 25 days from start date
• 26 days after 2 years
• 27 days after 5 years
• 30 days after 10 years

This can be managed with Tenure Based Allowance.

TimeOff.Management can move employees into the correct allowance band when they reach a service milestone.

Go to:

Policies → Tenure Based Allowance

Read more: Employee policies - Tenure Based Allowance

6. Use unlimited allowance

Unlimited allowance removes the idea of one fixed allowance balance.

This is useful if your company offers unlimited PTO or does not want to show a single remaining balance.

When unlimited allowance is enabled:

• the allowance widget is hidden
• the remaining balance is not shown
• employees can still book leave
• leave type limits can still be used
• approval rules still apply

Unlimited allowance can be assigned to selected employees, departments, or locations.

Read more: Unlimited Allowance

7. Make one-off allowance changes

Use manual adjustments when you need to add or remove days from an employee’s allowance.

This is useful for:

• TOIL
• overtime
• corrections
• extra leave agreed by the company
• removing allowance added by mistake
• one-off employee agreements

Go to:

Employee Details → Allowance tab → Allowance adjustment

Add the number of days and leave a clear comment.

All adjustment records are saved. This gives your company a transparent history of allowance changes.

Read more: Allowance adjustment

8. Set limits for specific leave types

Leave type limits are different from the main employee allowance.

Use leave type limits when you want to control how often a specific leave type can be used.

For example:

• sick leave
• working from home
• unpaid leave
• study leave
• compassionate leave
• special paid leave

A leave type can have its own yearly limit, even if it does not deduct from the main allowance.

Read more: Leave types

9. Set employee-specific leave type limits

Sometimes one employee needs a different limit for a leave type.

For example:

• most employees can book 5 working from home days
• one employee can book 10 working from home days
• one employee has a custom sick leave limit
• one location follows a different local rule

You can override the leave type limit for a selected employee.

Read more: Individual limits for leave types

10. Allow exceptions when needed

Some businesses need flexibility for special cases.

TimeOff.Management has two useful exception settings.

Negative allowance

Negative allowance lets selected employees book more leave than their remaining balance.

This affects the main allowance balance.

Read more: Negative allowance

Exceed leave type limits

Exceed leave type limits lets selected employees go above a leave type limit.

This affects leave type limits, not the main allowance balance.

Read more: Exceed leave type limits

11. Manage carry over at year end

At the end of the company year, you may want to move unused allowance into the next year.

Carry over can be managed company-wide or adjusted for individual employees.

Before carrying over unused allowance, make sure previous-year leave requests are added and approved. This keeps balances accurate.

For a fuller year-end process, read: End-of-Year Guide: How to Manage Vacation Carry Over Efficiently

12. Prepare allowance for the new year

Before the new company year starts, check that your allowance setup is still correct.

Review:

• department allowance
• individual employee allowance
• accrual schedules
• tenure-based allowance rules
• manual adjustments
• leave type limits
• carry over rules

Department allowance and individual allowance are designed to reset for the new allowance year.

Leave type limits are yearly limits and should also be checked before the new company year starts.

If you use accrual schedules, prepare the schedule for the next company year in advance.

Read more: End-of-Year Guide: Managing PTO/Allowance Limits for the New Year

13. Help employees use their allowance

Managers and admins can use unused allowance reminders to spot employees who may not be booking enough leave.

This helps avoid a rush of unused holiday near the end of the year.

Employees may be marked as:

• Underbooked — around 20% behind expected booking level
• Critical — around 40% behind expected booking level

Read more: Unused allowance reminder

14. View allowance as an employee

Employees can see their own allowance in My Calendar.

My Calendar can show:

• entitlement
• booked leave
• remaining balance
• carried-over days
• manual adjustments
• pro-rata calculations
• extra allowance earned from overtime or other contributions

Read more: My Calendar

15. Report on allowance usage

Admins and authorised users can use reports to review absence and allowance usage.

The Allowance usage by time report shows absence details by employee.

Read more: Reports

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Best practice

Start simple.

For most teams, department allowance is the best place to begin.

Then add individual overrides only when needed.

Use accrual schedules, tenure-based allowance, and leave type limits when your company rules need more control.

Before each new company year, review the full allowance setup. This helps keep balances accurate and avoids confusion for employees and managers.