Methodologies for Time Off Accruals

When it comes to accruing time off from work, there are two different methodologies that your employer can choose.

Hourly Accrual

One way to accrue paid time off is by the number of hours worked. This means that for each hour worked the employee earns a specific amount of paid time off. Based on an employee working an average of forty hours a week and accruing .063 hours of PTO per hour worked, this employee will earn around 131 hours of PTO, or about 16 days. This number will fluctuate based on the number of hours that the employee works over time or takes time off from work.

Fixed Time Accrual

Another way to accrue time off is based on the amount of time that has passed, regardless of the number of hours worked. For example, an employee might be hired with the agreement of receiving ten days of paid time off in his or her first year. The employee would then accrue the same amount of hours each pay period. The employer also has the option to grant PTO in a block all at once. This type of time accrual is often seen in the education system, where a teacher is granted all PTO at the beginning of the school year to use as he or she pleases. With a fixed time accrual, an employee will receive the same amount of PTO, regardless if he or she worked overtime or took a leave of absence.

There are benefits to accruing paid time off by both the number of hours worked and the amount of time that has passed. How time off is accrued depends on the needs of the industry as well as the employer.

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