Annual Leave
Paid time off that employees are entitled to take each year, separate from sick leave or public holidays.
Annual leave (also called vacation days or PTO in the US) is the number of paid days off an employee is entitled to take per year. The amount varies significantly by country: workers in the European Union are entitled to a minimum of 20 days under the Working Time Directive, while there is no federal statutory minimum in the United States.
For remote and globally distributed teams, annual leave policies need to account for different national holidays and different cultural norms around taking time off. Many remote-first companies adopt a single global PTO policy to ensure fairness across regions.
Some companies have moved to unlimited PTO models, where employees can take as many days as they need — provided their work is completed and their manager agrees. Research suggests that, without a minimum requirement, employees on unlimited PTO plans often end up taking fewer days than those with a set allowance.