Understanding Time-Off Allowances

In this article you will learn how to set your employees Time-Off Allowances on Factorial!

What are Time-Off Allowances? 

Time-Off Allowances are counters used to limit the number of days or hours that an employee can be absent from work. They can be found within a Time-Off Policy.

Where can I Find Time-Off Allowances?

  1. Head to Company 
  2. Select Time-Off
  3. Choose the Policy in which you will add the Time-Off Allowance
  4. In Basic Information, slide the mouse to find Time-Off Allowances
  5. Click on Add Time-Off Allowance
  6. Introduce an Time-Off allowance name 

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Configuring Time Off Allowances

Basic Information 

☝🏽 In order to configure your time-off allowance correctly, you must select Absence Types. There are two things to keep in mind:

  • You can only select absence types that were created beforehand.
  • And within one absence policy you can have one or more time-off allowances but you can only select a specific absence type for one of these time-off allowances. 

    Example: Imagine you created the absence policy UK. There you have two time-off allowances (A & B). If you choose the absence type Vacation in the settings of the time-off allowance A, you will not be able to select the absence type Vacation in the time-off allowance B because they exist within the same policy. 


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Cycle settings 

🔴 The Cycle Settings can only be utilised when selecting a Fixed Balance Allowance type.

  • Define the start of the cycle of your time off allowance
  • Define the cycle duration. You can choose between 1, 3, 6 and 12 month.
    ☝🏽 Within the selected time frame the settings in the time off allowance apply.  

☝🏽Cycles can no longer be edited once the allowance has been created. The counter relies on the assigned cycle to subtract or add the requested days of absence.

Allowance settings 

🔴 The Allowance Settings differ for Fixed Balance type and for Based on Time Worked type. More information about allowance setting for Based on Time Worked here.

  • Allowance is set in: 
    • Days
    • Hours
  • Display:
    • Days and half days
    • Days with decimals
    • Round up (full days)
  • Base Allowance days/hours: Number of available absence days for your employees during each cycle. Choose between working or calendar days. (If you select calendar days, a drop-down menu will appear.)  
    • Working Days: These days correspond from Monday to Friday excluding public holidays. 
    • Calendar Days: If you configure your base allowance days as calendar days you will be able to select whether bank holidays and weekends should be counted in or not.

💡Working days may change based on vacation policies based on the city of the company. Although every employee will have the same vacation policies, some may change switch up their working days in function of local holidays.

⭐ An example for companies that have workplaces in 🇧🇷 Brazil: If Time-Off ends before a bank holiday: You can determine to count the bank holidays/ weekends. For example, if an employee´s vacation ends on a Friday or before a bank holiday determine if that weekend and/or holiday will be counted as Time-Off for them. 

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  • How are allowance days/hours accrued?:
    • Accrued all at once
    • Accrued throughout the year on a daily basis
    • Accrued throughout the year on a monthly basis
  • When can they be used?
    • In the same cycle in which they were accrued
    • In the cycle following that in which they were accrued

💡The cycles will span from: A cycle is a 12-month period that defines when the allowance starts and expires. 

  • Can the counter be negative? 
    • Option 1: No, it is not possible to request more days than maximum available
    • Option 2: Yes, it is possible to request more days than maximum available


⚠️ Option 2 will be the option by default for new allowances and every existing allowance will have this option as default option.


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... and what happens when the employee requests an absence that includes more than one cycle?

In order to prevent an employee from requesting more time off than available, and also taking into account that an absence can happen during more than one cycle, these are the possible scenarios:

  1. The amount of avaible days is enough in both cycles

  2. The absence requested does not include more than one cycle but the amount available is not enough

  3. The amount of available days in the current cycle is enough but next cycle's is not

  4. The amount of available days in the current cycle is not enough but next cycle's is

  5. Neither current cycle's available days nor the next cycle's is enough

⚠️  In either case, a red warning message will appear at the bottom of the page.

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Allowance settings for Based on time worked

Now you can define the amount of time off your employees will obtain according to the hours they have worked.

💡Paid Time-Off based on time worked is useful for workers who get their salaries and time off according to the hours worked ( also for 0-hour contract workers in the UK, for example).


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👩🏽‍🏫 Learn more about Paid Time-Off for hourly workers here!

Carryover settings

💡Allow employees to carry unused allowance days or hours from one cycle to the next.

  • Carryover days/hours: How many days your employees can carry over into the next cycle?
  • Carryover days/hours expires: Define the expiration date of the carryover days. 

🔴 The Carryover section can only be utilised when selecting a Fixed Balance Allowance type.


☝🏽Cycles can´t be edited once the time-off allowance has been created. The counter relies on the assigned cycle to subtract or add the requested days of absences.

Tenure periods

🔴 The Tenure Periods section can only be utilised when selecting a Fixed Balance Allowance type.

Now you can determine if and after what amount of time your employees will be entitled to an increase in their allowance and how many days they will be granted.

👩🏽‍🏫 Learn more about Tenure periods from this Help Center Article here!

How can I delete a Time-Off allowance?

At some point you might want to delete a Time- Off allowance. 2 things you have to keep in mind:

  • You can delete a Time-Off Allowance by clicking on the configuration button.
  • You have to have at least 1 Time-Off allowance for a Time-Off policy. If you have at least 1, then you will be able to delete the second one, but if there´s only 1 left, Factorial won´t even offer you the option to delete, just edit the allowance.

💡If at any point, you will need to delete a Time-Off policy because of a defective cycle for a Time-Off allowance (for example), remember that you´ll have to assign all of the employees to another Time-Off policy, since an employee has to be assigned to at least one. 

How can I visualise the Allowances Created?

💡You will find all Allowances in the Time-Off Section. To gather more information, simply click on the small arrow.