How to Pay Out Accrued Paid Time Off (PTO)

This article explains how to pay out accrued Paid Time Off (PTO) in 7shifts Payroll when an employee wishes to receive payment for their accrued time, even if they have not taken time off during the payroll cycle.

Issue

Employees may desire to receive payment for their accrued PTO without actually taking time off. How can this be accomplished in 7shifts Payroll while maintaining accurate PTO balances?

Solution

Pay out accrued PTO by submitting and approving a time-off request that reflects the accrued balance. This process ensures accurate tracking and payment. Follow these steps:

Key Notes: 

• Time Off Submission and Approval Required: All PTO payouts must be processed through a submitted and approved time-off request in 7shifts.
• Schedule Impact: Approved time-off requests will mark the employee as "unavailable" on the schedule for the specified period, even if they work during that time. 
• Hourly Accrual Policy Limitations:
  • If your PTO policy is accrual-based, the payout can only include hours accrued within in the current payroll period.
  • The payout may not reflect the total accrual shown during payroll processing since payroll is submitted after the pay period ends.
  • When submitting a PTO request for payout, adjust the hours to reflect the accrued balance up to the end of the pay period.

Process to Payout Accrued PTO:

1. Create a PTO Request:
   • In the web app, navigate to Schedule > Time Off.
   • Create a Paid Time Off request on behalf of the employee.
   • Ensure the request is set within the last couple days of the pay period to reflect the total accrued PTO for that period.
   • Learn more about submitting time off on behalf of employees here.
2. Verify the Employee’s Accrued PTO Balance:
   • While creating the PTO request, review the employee’s accrued PTO balance. This will show the amount available up to the end of the pay period.
   • Enter the remaining hours in the Amount field of the request.
3.  Adjust the PTO Request (if necessary):
   • If the time-off request exceeds the available accrued PTO balance for the pay period, the system will provide a notification and prevent submission.
   • Modify the hours in the request to match the eligible payout amount.
4. Approve the PTO Request:
   • Approve the PTO request by setting the 'Status' to approved when creating the request. 
5. Process Payroll:
   • When processing payroll, the approved PTO will be included in the employee's pay.
   • If you've already started a Payroll Draft for the current Pay Period, "Resync Timesheets" to sync the PTO into the payroll.

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