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Managing Time Off in Justworks Payroll
Admins with Company HR permissions can set up time off policies in their Justworks Payroll accounts so that their employees can request days off through the platform. Admins will be able to approve or deny time off requests, as well as view and manage employees’ time off balances.
To set up a PTO (Paid Time Off) policy, follow the steps below.
Adding a Time Off Policy
Start by clicking into the Time Off tab in the left-hand side menu of your Justworks Payroll account. Then, click the Policies tab, followed by the + Add policy button.
Screenshot showing the + Add policy button on the Policies page.
Step 1: Set Up — Basic Policy Details
On the set up page you’ll be able to enter these key policy details:
- On the first page, you'll enter these key policy details:
- Policy name: How the policy will appear in employees' accounts.
- Policy type: Determines how the policy is categorized. Options: Vacation, Sick leave, Other, or Limited access.
- Policy start date: When the policy takes effect. This can be the start of the current year — you will be able to provide a report of employees' current PTO balances to ensure they're starting with the correct amounts.
- Policy end date (optional): Leave blank for an ongoing policy, or set an end date to have the policy automatically deactivate on that date. This is useful for temporary or seasonal policies.
- Timecard sync: Choose whether to sync this PTO policy with employees' timecards. When enabled, both approved PTO requests and manually recorded time off will sync to timecards. Syncing will only occur when timecards are enabled, either now or in the future.
Screenshot showing the setup page where admins will need to enter the policy details.
Policy Structure
Step 2: Set Structure — Cycle and Balance
On the next page, you'll determine the policy structure: the annual cycle, balance structure, and any applicable settings.
Policy cycle:
- Employee's work anniversary: Policy restarts on each employee's individual work anniversary.
- Calendar year: Policy restarts on January 1st of each year.
Balance structure:
- Granted up front: Employees receive their full PTO balance on the start date of their policy cycle. Admins can choose whether to prorate the balance for employees who join mid-cycle (see Proration below).
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Accrue over time: Employees accrue PTO incrementally, using one of two accrual methods:
- Total amount for the cycle — Enter the total number of days the employee will accrue over the cycle. You can prorate for employees who join mid-cycle.
- Accrual rate — Enter the hours an employee must work to earn 1 hour of PTO. PTO is granted based on hours recorded on processed timecards. The grant effective date is the last day of the pay period, and the balance updates after timecard processing completes (not at approval). You can also choose whether employees accrue PTO on overtime hours ("Allow accrual on overtime") from this step.
- Unlimited/Flexible: Employees have no set PTO balance and can submit time off requests at any time. Admins approve or deny requests at their discretion.
Screenshot showing cycle and balance structure sections, with calendar year and granted up front selected.
We recommend discussing applicable regulatory constraints with your legal advisor prior to creating PTO policies, as certain states impose restrictions on how employers may limit carryover of accrued time off, among other restrictions.
Screenshot showing accrual rate as the accrual method and the option for allowing overtime accrual.
Proration (Granted up front and Total amount for the cycle only):
When proration is enabled, an employee who joins mid-cycle receives a reduced amount based on the working days remaining in the cycle (weekdays minus company holidays) divided by the total working days in the cycle. When proration is disabled, the employee receives the full grant amount regardless of when they join. This toggle is configured during policy setup under the balance structure step.
Policy Add-Ons
If you select Granted up front or Accrue over time as the balance structure, you can configure policy add-ons. More detail is available on the PTO Policy Add-Ons page. Available add-ons depend on the balance structure selected:
- Negative balance: Allows employees to submit time off requests for more hours than they currently have in their PTO balance. When disabled, the system blocks requests that would exceed the available balance.
- Carryover: Controls whether unused PTO rolls over when the policy cycle restarts. Options include unlimited carryover, limited carryover (up to a set number of days), or no carryover.
- Carryover limit: When limited carryover is selected, sets the maximum number of days that can carry over.
- Negative carryover: When enabled, a negative balance carries into the next cycle rather than resetting to zero.
- Balance cap: Sets the maximum total PTO balance an employee can hold at any time. Once an employee reaches the cap, no additional PTO accrues until they use time off and fall below the cap.
- Maximum cycle accrual (Accrual rate only): Sets an upper limit on how much PTO can accrue within a single cycle, regardless of hours worked.
- Tenure (Granted up front and Total amount for the cycle only): Adjusts how much PTO an employee receives based on their length of employment. Admins define tenure tiers (for example: 0–2 years = 10 days, 3–5 years = 15 days, 6+ years = 20 days). As employees cross thresholds, their PTO amount updates automatically at the start of their next policy cycle.
Screenshot showing where admins can set up policy add-ons.
How tenure increases work:
For a policy on the calendar year annual PTO cycle, tenure increases will occur on January 1, after your employee’s 1st work anniversary. For example, an employee with a start date in February 2025, will receive their first tenure increase on January 1, 2027. For a policy on the employee work anniversary annual PTO cycle, tenure increases will occur on the employee’s work anniversary.
Step 3: Review
After configuring the policy structure and add-ons, you'll review your settings before saving.
Assigning Employees
After the PTO policy has been created, you can select which employees to assign. To help organize, you can group employees by employee type, department, or office location. For example, you can create different PTO policies for full-time and part-time employees, or give employees in New York a different policy than employees in California.
Screenshot showing where admins assign employees to a policy.
You will also have the opportunity to manually adjust starting balances for assigned employees if desired.
Screenshot showing where admins can adjust assigned employees' starting balances.
Editing policies
For each active PTO policy, you can edit, manage employees, and deactivate the policy via the dropdown in the upper righthand corner of the policy card.
Screenshot showing the dropdown menu on an active PTO policy.
If you need to add employees to an existing PTO policy, click on the dropdown menu for that policy, select Manage employees and follow the workflow in the Assign Employees section.
You can also unassign employees via their member profile. To do this, go the individual employee's profile via the People workspace in the left-hand side menu. Once you're on their profile, click on the Time Off tab; there you will see any PTO policies to which the employee has been assigned. At the bottom of each policy, you will see an Unassign button; click this button to remove an employee from a PTO policy.
Screenshot showing the Time off section of the employee profile with the Unassign button circled in red.
Edit policy allows you to update PTO accrual and policy settings with guardrails in place to help protect employees’ historical balances. Upon clicking the button, you will go through a flow similar to the Create new policy flow.
Screenshot depicting the beginning of the Edit policy flow.
You can update:
- Policy name and type
- Timecard sync settings
- Total PTO amounts (increase or decrease)
- Policy add-ons, such as balance cap, tenure, and carryover
If an edit would reduce an employee’s PTO balance, you’ll see an alert in the product so you can review it before applying the change.
Screenshot showing a "Balance reduced" notification due to edits to the PTO policy.
To preserve historical accuracy, the following fields can’t be changed after creation:
- Policy start date
- Policy structure (for example, switching from unlimited to granted upfront)
If you need to change a policy's balance structure, deactivate the current policy and create a new one. Before doing so, download the PTO Balance Report (go to Analytics > PTO Balance Report) so you have employees' current balances to enter as starting balances in the new policy.
When edits take effect:
- Calendar year policies: Edits can either apply to the current cycle (retroactive to the start of that cycle) or take effect at the start of the next cycle on January 1.
- Anniversary-based policies: Edits apply to the start of the current policy cycle.
Edits do not apply to prior cycles — past balances remain unchanged.
Deactivating policies
Navigate to Time Off > Policies. Click the dropdown menu for the policy and select Deactivate.
A confirmation panel will appear with important information about the change. Choose a deactivation date and click Deactivate policy when you're ready.
Once a policy is deactivated, it cannot be reactivated through the admin UI. If you need to offer PTO again, create a new policy.
Screenshot showing the Deactivate policy flow.
Managing Time Off Requests
When an employee assigned to a time off policy submits a time off request, their admin will have a new alert on their Justworks Payroll dashboard, prompting them to approve or deny the request.
If approved, the employee's time off will be listed on the company calendar. PTO days are deducted from the employee's balance in real time as each day of the request occurs.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.