Are Unlimited PTO Policies Worth It?

12 min read | Feb 18, 2026

By Ad Culture Admin

Unlimited PTO policies can keep employees healthy, happy, and productive, but only when leaders set clear expectations, manage workloads well, and support time off in practice. Without a clear structure and positive culture, these policies can breed burnout, resentment, and turnover.

“Healthy work-life balance” is the rallying cry of modern HR, and unlimited paid time off (PTO) is often touted as the ultimate perk to achieve it. Yet, we see brands quietly rolling it back and employees citing burnout and non-compliance.

So, what’s the verdict? Is unlimited vacation time a true perk or something employers should scrub from their employee handbooks? Let’s find out!

How Do Unlimited PTO Policies Work?

An unlimited PTO policy allows employees to take as much paid time off as they need, with no fixed annual cap. Unlike traditional PTO, there’s no accrual to track.

Here’s how it (typically) works in practice:

→ Employees request time off through the standard HR system or directly with their manager.

→ Managers review PTO requests based on workload, team coverage, and project deadlines.

→ The manager approves, adjusts, or denies the request in accordance with the company’s established approval process.

→ If approved, the employee takes their time off.

Note: Regulations and expectations vary significantly based on leadership style, workplace culture, and business needs.

Related Reading: An Employer’s Guide to Benefits for Employees in Canada

Image Source: Shutterstock

What are the Benefits of Unlimited PTO?

When implemented with intentional structure and genuine cultural support, unlimited PTO can deliver real value for employees and employers alike.

Related: How to Cultivate a Positive Company Culture

Why Is Unlimited PTO Controversial?

In practice, an unlimited PTO policy functions more as a discretionary allowance. Since most companies offering unlimited paid time off require manager approval, employees often feel like they can’t truly “take a break whenever they want.”

Workloads, deadlines, and team coverage often dictate when, and if, time off is granted. This is especially true for marketing, tech, and advertising professionals. Since workloads are often project-driven and subject to tight deadlines, there’s rarely a good time to be away.

Worse, many companies only use unlimited vacation to dodge paying accrued vacation. Under traditional policies, earned but unused PTO must be paid when an employee leaves. With unlimited plans, there is nothing to accrue, and thus nothing to pay out.

Do Employees Actually Take More Time Off?

In the early years (unlimited PTO has been around since the early 2000s!), reports consistently showed that employees using plans took fewer vacation days.

These days, the picture looks slightly better. Recent reports show that employees with unlimited PTO take 16 days off, compared to 14 days for those with a fixed allocation (US).

Despite this, popularity is declining, with companies like Bolt and Kickstarter ditching the policy entirely. While many people view unlimited PTO as a scam that benefits employers more than employees, there are downsides for employers, too.

What Are the Disadvantages of Unlimited PTO?

Poorly managed unlimited vacation policies may lead to:

• Coverage gaps and disruption of business operations. When improperly managed, you may find yourself short-staffed during a major campaign launch or client pitch.
• Decreased morale and trust. Inconsistent or unfair approval patterns cause resentment and distrust.
• Recruitment and retention challenges. Employees talk, and they’re especially vocal online about benefits and compensation. Once your brand or agency gets a reputation for a “fake” unlimited PTO policy, top talent will choose your competitors.
• Legal compliance risks. Many regions offer statutory minimum vacation entitlements (such as in Canada and many EU countries). Without proper tracking, you might inadvertently violate these requirements.
• Bias, favoritism, or discrimination. Without clear parameters, managers must make subjective calls about what’s a reasonable request and what’s “too much” time off. This opens the door to bias, favoritism, and inconsistent application across teams.
• Pressure to remain constantly available. Employees may find it harder to establish and defend clear boundaries between work and personal life.
• Potential overuse. While less common, the lack of a formal cap can lead to some employees exploiting the policy.
• Ambiguity and anxiety (among employees). The lack of a defined “bank” of days creates uncertainty, leading to guilt and hesitation when requesting time off.

TLDR: Unlimited PTO Pros and Cons for Employers

Before you implement an unlimited vacation policy at your organization, weigh the pros and cons:

What Is the Difference Between Unlimited PTO and Regular PTO?

Unlimited PTO has no cap or accrual, whereas accrued PTO allocates a specific number of days off each year.

Note: In Canada, employees working for a federally regulated employer are entitled to statutory holidays plus annual vacation (entitlements depend on years of service). When unused, employers must pay out vacation pay. This is calculated as a percentage of gross wages earned during vacation time, based on years of employment.

Is Unlimited PTO Better Than Accrued PTO?

Unlimited PTO isn’t inherently better than accrued PTO because there’s no universal “better” option. Your results depend entirely on your organization’s:

• company culture
• management
• implementation and operational preparedness

So, How Can You Make Unlimited PTO Work for Your Company?

If you’re thinking of offering unlimited PTO to your employees, you need clear, documented policies supported by a culture of trust. Here are some strategies to consider:

Establish Guardrails & Set Expectations

Create a documented policy that outlines the who, how, when, and why. Include:

• Clear definition of “reasonable use” as in whether it’s applicable to rest, personal time, family, and health needs.
• Provide a realistic range. Consider providing a maximum or minimum number of days employees can take off in a row.
• Set advance notice periods (e.g., 2+ weeks for planned leave, 24 hours for sick days)
• If they exist, identify specific weeks or periods where time off may be restricted due to critical business cycles.
• Outline an approval framework to avoid discriminatory or biased decisions.
• Define what constitutes an abuse of policy + disciplinary process.

Build a Supportive Culture (Top-Down)

To maximize the potential benefits of unlimited PTO policies, your management needs to walk the talk. Here are some ways to build a culture of trust and autonomy in your team:

• Prompt managers and executives to take visible time off and encourage their teams to do the same.
• Encourage employees to plan longer vacations in advance. This improves team communication, makes coverage planning easier, and gives everyone visibility into who’s out when.
• Make vacation planning a regular part of performance conversations. Let your people know taking breaks isn’t just an afterthought or administrative task. It’s a benefit, and they should enjoy it.
• Create a culture where breaks are viewed positively. Celebrate people taking time off, share travel stories, and make it part of the conversation as much as possible. Normalize conversations about vacations and breaks in meetings!
• Train your leaders. Ensure supervisors understand how to consistently evaluate requests and spot team members who need encouragement to take breaks.

Implement Structural Safeguards

Here’s how to build a structure around your policy:

• Set mandatory minimums. If your employees aren’t taking enough time off, they might be unsure about your policy (and potentially headed for burnout). Require at least 15-20 days annually to ensure everyone uses the benefit.
• Monitor how many vacation days employees are taking. Reach out to people who aren’t getting enough vacation time!
• Create systems for handoffs, backup coverage, and project continuity.
• Create escalation paths for denied requests. If a manager denies time off, employees should have a clear process for appealing or understanding the reasoning.
• In regions with statutory minimum vacation (e.g., Canada, EU), you must track usage to guarantee every employee takes at least the legal minimum.

Verdict: Is Unlimited PTO Worth It?

Unlimited PTO can be worth it when implemented intentionally, with structure and a genuine culture of trust. Otherwise, it can lead to employee anxiety, burnout, inequity, and operational disruption, while primarily saving the company money on accrued vacation payouts.

For most organizations, a generous and clear accrued PTO policy is the safer and more reliable choice. Traditional PTO allocates a specific number of days per year that employees can easily track and take ownership of.

If you want to implement unlimited PTO successfully, ensure you have clear documented policies. Outline processes and guidelines to communicate expectations and prevent bias.

Hire People Who Work Hard and Play Hard

Finally perfected your unlimited PTO policy? Let’s get you the people who’ll appreciate them.

At Ad Culture, we connect you with creative talent who fit your vibe, not just your job description. We work with copywriters, designers, social media managers, and advertisers who know when to push and when to unplug.

Take a break from recruiting and let the experts find your marketing pros. Let’s build your dream team today!