The Payroll Blog

News, tips, and advice for small business owners

How Much Vacation Time Should Employees Receive?

Posted On
Chris Bibey

Small business owners are faced with many challenges, including those associated with employee benefits.

Woman laying on the beach in a sun hat.

There is one benefit that is discussed just as much, if not more, than the rest: vacation time.

It doesn't matter if you are hiring a new employee or trying to do the right thing for your current staff, the question of how much vacation time employees should receive is sure to come up at some point.

What’s the Right Answer on Vacation Time?

Like sick days, there is no right or wrong answer regarding how much vacation time you should give employees. This is what makes a final decision so challenging.

Before you make a final decision, there are some questions you need to answer:

  • Will employees accrue vacation days, or will you award all of them on the first day of the year?
  • Will you allow employees to carry vacation days over from one year to the next? If so, how many?
  • Have you considered the idea of offering unlimited vacation days? This sounds crazy, but it’s 2019 and many companies realize how important it is for employees to take time away from work.

Find a Happy Medium

Even though more companies are offering unlimited vacation days, it’s not likely to become the norm. For this reason, you need to find a happy medium.

According to the United States Department of Labor, the number of vacation days provided to an employee corresponds with their years of service. Here are some statistics for private industry workers, based on averages of data collected:

  • Workers receive 10 paid vacation days with 1 to 5 years of service
  • Workers receive 15 paid vacation days after 5 years of service
  • Workers receive 17 paid vacation days after 10 years of service
  • Workers receive 20 paid vacation days after 20 years of service

When you combine these numbers with the results of our survey, you should have a better idea of how many vacation days companies are offering. This information will give you a starting point when making this all-important decision.

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