How do I manage time off in FreshBooks Payroll?

For FreshBooks Payroll powered by Gusto users, you can set up policies for paid time off (PTO), sick leave, and holiday pay, then assign employees to them. When you run payroll, enter the employee’s time off and this will automatically come out of their available balance.

Add a Time Off Policy
Manage Policies
- Manage Policy Details
- Manage Employees on a Policy

Add a Time Off Policy

You can create the following time off policies in FreshBooks Payroll:

Time Off Pay - Also known as vacation pay, or paid time off (PTO), create unlimited or accrual-based vacation policies
Sick Pay - Create unlimited or accrual-based sick policies
Holiday Pay - Create a holiday policy based on a standard list of federal holidays, with the option to choose which holidays to follow

Create a new time off policy with the following steps:

Select the Payroll section on the left
Then select the More Actions button in the top right corner
Select Payroll Settings
Under Employee Management, select Time off management
Select the Add policy button
For Select policy type:
1. Select Holiday pay to give employees time off for company holidays
  1. Then select Continue
  2. To select all holidays, check off the box next to 0 selected to select all, or check off the boxes next to the specific holidays you want to give to employees
  3. Select Continue
2. Select Time off for paid leave or combine vacation and sick time into one PTO policy
  1. Then select Continue
  2. Enter a Policy name
  3. For Accrual type:
    1. Select Based on hours worked, then specify the Accrual rate and Reset date
    2. Select Fixed amount each year, then specify the Accrual rate and Reset date
    3. Select Unlimited
  4. Then select Save & continue
  5. Next, for Policy settings, slide the toggle on or off for Balance maximum, Carry over limit, and Payout on dismissal
    1. If Balance maximum and/or Carry over limit are selected, enter the Number of hours
  6. Then select Save & continue
3. Select Sick leave for employees to use when they’re sick or caring for their health
  1. Then select Continue
  2. Enter a Policy name
  3. For Accrual type:
    1. Select Based on hours worked, then specify the Accrual rate and Reset date
    2. Select Fixed amount each year, then specify the Accrual rate and Reset date
    3. Select Unlimited
  4. Then select Save & continue
  5. Next, for Policy settings, slide the toggle on or off for Balance maximum, Carry over limit, and Payout on dismissal
    1. If Balance maximum and/or Carry over limit are selected, enter the Number of hours
  6. Then select Save & continue
Next, check off the box next to Name to select all employees, or check off the box(es) next to the specific employees you want to add to the policy
Then select Save & continue
For the Paid time off policy and Sick leave policy, specify the Starting balances for each employee
Then select Create policy
Next, select the Time off policies link at the top left corner to return to the list of policies
If needed, repeat steps 5-9 to add additional policies
Then select the < Back link in the top left corner to finish managing your time off policies.

Time Off Policy Notes:

Holiday Policy - Only one holiday policy can be active for your business
One Vacation Policy Per Employee - Multiple vacation policies can exist but each employee can only be assigned to one vacation policy at a time
- If an employee is assigned to a new vacation policy, they’re removed from the prior one and their balance transfers to the new policy

Manage Policies

You can update your time off policies, as well as add new employees or remove employees from existing policies.

Manage Policy Details

To view the details of a policy, including the accrual rate and policy settings, or to remove a policy, use the following steps:

Select the Payroll section on the left
Then select the More Actions button in the top right corner
Select Payroll Settings
Under Employee Management, select Time off management
In the list of Time off policies, select either:
To view the policy’s details, under Name, select the policy
1. Use the Employees tab to find all assigned employees, or the Holiday schedule / Policy details tab to find the list of holidays or the policy’s details, accrual rate, and policy settings
To edit the policy, under Name, select the policy
1. Then select the Policy details tab
2. Then select the Edit policy link
3. Update the Policy name, Accrual type, Accrual rate, and Reset date as needed
4. Then select Save & continue
5. Update the Policy settings as needed, then select Save & continue
To delete a policy, select the three dots next to the policy
1. Then select Delete policy
2. Select Confirm to finish, the policy will no longer be listed in your list of Time off policies
Select the < Back link in the top left corner to finish managing your time off policies.

Manage Employees on a Policy

To update an employee’s balance, or add or remove employees on a policy, use the following steps:

Select the Payroll section on the left
Then select the More Actions button in the top right corner
Select Payroll Settings
Under Employee Management, select Time off management
In the list of Time off policies, select the policy
To update an employee’s paid time off or sick leave balance, select the three dots next to the employee
1. Then select Edit balance
2. Update the New balance total, then select Save, the employee’s balance will be updated to the new total
To add an employee, select the Add employee button
1. Then check off the box(es) next to the employee and select Save, the employee will now be listed for the policy
To remove an employee, check off the box(es) next to any employee and select Remove employees
1. Then select Remove employees to confirm, the employee will no longer be listed for the policy
Select the < Back link in the top left corner to finish managing your time off policies.