Setting Up Time-Off Policies
The build order that avoids rework: pay codes, then types, then policies, then people.
The build order
- Pay codes first. Each paid leave type needs a pay code so it lands on payslips correctly — a "Vacation" code, a "Sick" code. (Payroll configuration)
- Create the types. Define each leave's behavior on the type form: balance on or off, rollover, accrual, year start, negative balance, hidden balance, supporting documents, blackout adherence, and the tax switches. Names lock after creation — decide before you save. Two things here are easy to skip and worth doing on the first pass: if you allow a negative balance, decide what happens when a request exceeds it — the default is to pay it in full and let the balance go negative, so choose Block the request or Allow, unpaid, with extra approval if that is not what you want; and fill in the Presentation & Policy section, because a category, a pay treatment, a notice figure and two or three policy lines are what stop the same question reaching HR every week.
- Build the policies. Per type, add tenure thresholds — days allowed at 0 months, after a year, after five. Different rules for different groups (line staff vs management, by territory) mean different policies, not different types. Add a probation restriction if new hires must wait.
- Set workdays, blackout dates, and calendar privacy so requests count days correctly and freezes are enforced. Workdays matter more than they look: with no working week configured, the approval screen can't measure notice at all and says so rather than guessing.
- Assign people. The policy is required at employee creation; for an existing workforce, a bulk update assigns policies en masse.
- Load opening balances. Migrating mid-year? Use the bulk balance import with an effective date, so everyone starts with the balance they'd accrued under the old system.
- Test with one person. Pick a demo or willing employee, submit a request, approve it, and check the balance math and the payslip line before announcing to staff.
Types are company-wide; policies are per group
The classic mistake is creating "Manager Vacation" and "Staff Vacation" as two types. That splits balances, reports, and payslip lines forever. One Vacation type, two policies with different thresholds — that's the model the system is built around.
Don't build a balance-holding type that pays on top of salary
A type that draws down a balance but has Does this type deduct regular pay? switched off pays a salaried employee their full salary and pays again for the same day. Saving that combination is refused only if your account has turned that check on, under Settings → Time Off → Rules — it is off by default. If you genuinely want to pay on top of salary — a payout, a bonus-style line — turn off Should this time off type have a balance? instead. Types built this way before the guard existed still work, and are quietly overpaying: audit them.
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Leave setup for a 30-person company (6 min)
Screen recording of the full build order: Vacation and Sick types, one policy with three vacation thresholds and a sick allotment, blackout week in December, bulk-assign the policy, import opening balances, then one test request through to approval. Narrate the type-vs-policy distinction at the start.
Save as: how-to__time-off-policy-setup__vid1.mp4