Close this search box.

How Much Paid Vacation Time and Paid Holidays to Offer Employees

Employees need to take short breaks during the day to recharge during work. If they don’t, they can become burnt out and less productive. Likewise, employees need longer breaks during the year to recharge on an even deeper level. Offering paid vacation time can improve an employee’s long term health and well being within the company.

If you’re interested in allocating time off, try our free calculator.

Vacation time is just as important as the lunch break and two fifteens, if not more. Without it, an employee’s work will start to suffer. Holidays and vacations allow employees the chance to spend time with family and friends, take time out for themselves, work on new projects, or discover new places. When they do this, they return to work recharged and more productive.

HR Tools analyzed vacation and productivity in a recent article saying,

“The most productive, successful employees are typically those that utilize their vacation time and return to the office with a renewed sense of drive and determination.”

Taking time to switch focus can have a huge impact in our work and, when we’re talking productivity, we’re talking dollars. Without paid vacation time, employee productivity wanes, which is costly. Allowing employees to recharge once or twice a year helps employees to do more, better quality work.

Paid Vacation Time Laws

In the US, there are no laws mandating paid vacation time. This is not the case in many other countries, however. Look at this bar graph to see the requirements for paid time off around the world.

Some states, like California, do consider vacation time as wages. So if you offer vacation time, you must pay it out like wages upon termination of employment.

How Much Paid Vacation Companies Offer

Typically, the longer employees work for a company, the more vacation time they get. According to the Bureau of Labor Statistics, 73% of all civilian workers had access to paid vacations.

It is typical for employers to offer employees up to:

  • 11 days after their first year of service
  • 15 days after five years of service
  • 17 days after ten years of service

These are averages reported by the BLS. The average number of vacation days varies depending on the company size as well.

Smaller and, in particular, younger companies may offer less vacation time. However, this is not always the case.

Offering Standard Paid Holidays

Paid holidays are another important benefit. These are days people typically spend with friends and family or engage in special events. They are important days because they bring us closer to the ones we love, and love and friendship make us healthier people!

Not everyone takes advantage of holidays in this way, for most of us, we’ll be picnicking in the park or cozying up by the fire with family on these special days. We then return to work with a renewed sense of calm and drive, which is always great for business.

There are about 10 yearly holidays in the US, but the most common paid holidays are the following:

  1. New Years Day
  2. Memorial Day
  3. Fourth of July
  4. Labor Day
  5. Thanksgiving
  6. Christmas

Tracking Paid Vacation Time

The accruals tracking software offers full time off tracking to make the tracking process simple. Each employee will have their own accruals set up so that their amount to accrue and even their accrual rate will be specific to them. Then, employees enter requests which employers either approve or deny.

Get started tracking vacation time.

31 Responses

  1. I totally agree with you. Everyone needs to have a vacation to recharge our battery in order for us to be more productive at work. For me, every employee should have 4 days of vacation.

    1. Per year? I doubt 4 days would be quite enough to really wind down. If you gave them 5, they could take off somewhere for 9 days (two weekends).

  2. I think new employees should start with one week and at six months they get an additional week. A minimum of 2 weeks going forward, increased as they gain in seniority. Holidays should be at least 9. Those making the rules can’t relate to single parents and how much time is needed for medical appointments, etc. They also probably don’t remember being an hourly employee or perhaps never were. Many employees have to use vacation hours to cover personal appointments and can’t just flex their schedule as exempt staff can. Work-life balance!!

    1. Thank you for your input. It is certainly true that working parents have a lot of responsibilities and could easily use a good chunk of the PTO in appointments and child sick days, leaving little for vacations. If employers are able, this should be considered. However, many small business owners have their own set of challenges and may not always be able to accommodate.

  3. So I’m a cosmetologist I work for an employer i get paid 50/50 commission, not by the hour. I work 5 days a week total of 43, two days off consecutive Monday and Tuesday. I’ve worked for her for 3 years no benefits no insurance get paid cash. And I recently asked for a weekend off Friday Saturday and Sunday two months in advanced. And she said that that will be considered my week of vacation for the year. It doesn’t feel right or fair at all in my eyes. What should I do ?

    1. There are no laws requiring an employer to offer vacation time, so….. I would look for another job

  4. I have worked for a small company for over 10 years. I get 2 weeks paid vacation and 5 sick days (PTO). I am also a salaried exempt employee. When I take off for doctor appt, by boss deducts those hours from my vacation or PTO even though I work more than 40 hours a week and manage the office while he is out. What would the standard number of days (vacation & PTO) for an employee of more than 10 years and should he be deducting those hours?

  5. How are businesses supposed to pay for all of this time off? The company I work for just started offering 5 weeks for employees with 16 years of employment because one worked constantly complained about wanting another week. We already receive 4 weeks plus 8 paid holidays plus California’s mandated 3 paid sick days We also get 3 paid jury days as well. I hope my employers can stay in business with all of this loss in production, not to mention the massive new overhead…

    1. Hi Joe. Time off is a business expense. Businesses have quite a few big price tag expenses. Funding payroll is just a part of the deal when you start a business. But I understand your concern. Time off costs money and productivity. Managing that takes planning.

    2. Thanks for thinking of the small business, Joe. It is rare that employees think about their impact on work flow and cash flow for the business as a whole. We are in Ohio, but are having an issue where all of our employees (there are 9) want to take time off next month. It isn’t possible if we want to keep the doors open. Every time one person takes a day off, it costs us an additional half day of production because someone else has to fill in for at least half the day to keep everything going.

  6. That’s a nice thought, and, in an ideal world, it’d happen. However, most small businesses can’t even afford to pay someone to fill in while another employee is away. That means that someone has to volunteer their time and forfiet the extra pay that would normally accompany overtime in “corporate America” to cover the vacationee’s (yes, I just made up a word to fit this context) 20-40 hours per week. I have had a total of 15 days off of work since 2015 (INCLUDING WEEKENDS!). I can’t take a day away from my job without negatively impacting someone else’s schedule. It just doesn’t happen. If someone is gone, someone else is made miserable (namely me), with twice the work that they aren’t getting paid for, let alone giving the employee who isn’t there a paid vacation, and, because of the extra workload, mistakes are made.

    1. Wow. I can see why you hate your job! I would too! Your employer is really spreading the staff thin, if things are as you portray them. However, since no one else seems to have a problem taking time off, why should you? Do you own this business? If not, then how it runs is up to the owners/managers. It’s really not worth stressing yourself out over.

      1. THERE is the attitude I am used to as a small business owner. Take what you can, It’s not your business. I’ll take Joe over you as an employee any day.

        1. I absolutely agree with Tceperry. This is the true face of corporate America, take what you can, its not your business. And then you complain about small business owners not being considerate. Someone else earlier spoke of business expense in the name of time off. small businesses struggle greatly, that’s why they are small businesses and not big ones. If employees start taking ownership, a lot can be achieved. More vacation time can come too, it’s all in partnership.

        2. Then do not expect to keep talent. Turn around is more expensive. Without employees, your company doesn’t run. Happy employees look out for your business–at least to their capability.

        3. If it’s a part of employee compensation then any employee not taking all of their vacation is in effect subsidizing your business. Worker’s, just like investors and managers, are independent economic agents seeking to maximize their utility, given the constraints that is put upon them. If you’ve offered them a certain amount of vacation days as a part of employee compensation, you have no right to deny them that vacation.

  7. When does my vacation time start to accrue if the employee policy says ” Vacation time is earned based on the number of completed months of service by each twelve-month period, commencing after the successful completion of the employee’s evaluation period. After one year of continuous employment at full time status, employees are eligible for 8 days of paid vacation time each year. After two continuous years at full time status an employee is eligible for 10 days. After five continuous years at full time status an employee is eligible for 15 days of paid vacation annually. ”

    if I’ve been at the company for 1 year, do I have 8 days of vacation or am I at zero and just now eligible to start accruing? Or did I start accruing after my 90 day eval period and will have 8 days after I’ve worked 1year plus 90days.

    1. Hi Kim,

      You’ll have to talk to your employer about that. But it’s likely that after one year with a company that has a vacation policy, you probably have some time available to use. Either you would have gotten your lump sum after 1 year, or you’d have started accruing after the probationary period.

  8. We have a growing business of 10 years with 9 employees and have had a lax paid time off policy. Some employees have started taking more than their allowed paid time off. My husbands way too empathetic to actually do any payroll deductions for the overages. He believes all the sad stories he hears- even from the newest employee.
    We are implementing new policies- he want to have all employees personal days AND vacation days start each year on Jan 1. Please help me convince him that vacation days Have to go by their individual start date.

  9. I am in my third year with a company that does not offer paid holidays or paid sick days. They only offer 5 days of paid vacation, EVER! There are coworkers who have been here for over 30 years and they only have 5 days of paid vacation. I’m looking for another job!

    1. I wouldn’t have taken the job to begin with. five days vacation a year after THIRTY years?’ I’m surprised they have anyone working there.

  10. I have worked for small and large companies both. I will admit that I received more benefits with a large company. I have been a small business owner for over 12 years now. We(my husband and I) try to come as close as we can to giving our employees all the same benefits they could get at any large company in our area. It is not without sacrifice on our part. We are the ones that work the 16 hour days so our employees can go on vacation. When we go on vacation we work over before and after we go to get the job done. We know this is part of running a small business. Our employees say they would rather work for us for a little less in benefits than go any place else, because we make exceptions for their needs whenever possible. Our Payroll expense is 75-80% our Gross Profit compared to large companies in area payroll being 10% or less.

  11. I’m coming up on 18 years at my current employer (22 total employees). I have 2 weeks and 3 days paid vacation, but I’d like to ask for another week vacation. I know there are employees who have been hired and were given 3 weeks vacation from the start. I don’t think my request is unreasonable. Thoughts?

    1. Hi there! You certainly can speak with your employer about changing your vacation policy, considering they are the ones who made the policy. Just keep in mind that your employer may not agree with you. I would say it’s at least worth a conversation!

  12. I don’t know how I got here reading these comments but I am stunned by what I am reading here. I am from Europe and I cannot believe that American people are only getting 5 days vacation per year and only 10 days after 10 years. In Europe, like for example England, the employees are getting 28 days vacation from day 1 and in France 5 weeks vacation as soon as you start employment. Something is really wrong in the US, why are the people not demanding more vacations, why is the law so different in the US. I will never work in a country that would only give 5 days vacation per year, it is pure exploitation. It is the law in Europe for employers to give at least 4 weeks vacations per year as soon as the first year of employment. Why don’t you “US employee” make demands, you have all the power.

    1. Interesting thoughts! Unfortunately the federal government really doesn’t have any laws pertaining to sick time, vacation time, or holiday time. This is usually upon agreement between the employee and employer. A lot of Americans fight for more rights and more time off every day, but it’s a long battle that we have yet to win.

Leave a Reply

Your email address will not be published. Required fields are marked *

News & Tips for Small Business Owners, Employees, and Accounting Professionals


We Help Thousands of Employers Manage Time, Time Off, and Expenses is trusted by small businesses everywhere as a recognized industry leader