The State of Time Off at Small Businesses

May 26, 2016

Category: HR Tips & Trends, Time

What’s the right time off policy for your company? How much time do employees need? How much time are other companies in your region providing? Are you offering enough time off to remain competitive? And when employees do take off – is any real work actually getting done by the rest of your team?

If you’ve found yourself questioning these very topics, you’re not alone. Time off is one of the most critical benefits a company can use to be competitive. It’s also one of the most flexible – making it harder to determine a “norm” since policies are often structured differently depending on business needs.

At a time when experiments with flexible work arrangements and unlimited vacation abound, we wanted to check in on how small businesses and their paid time off (PTO) policies stacked up. This benchmarking report is the result.

Let’s dive in!

How much time off do Americans receive?

Compared to other countries around the world, it’s no secret that companies in the United States offer relatively little time for employees to recharge. According to research from the Center for Economic and Policy Research, almost 1 in 4 Americans don’t receive any paid vacation or paid holidays – a fact that’s fueling new legislation at both the local and federal level, pushing to provide workers a better work-life balance.

Let’s take a look at how the current U.S. numbers break down per year:

How much time off does the average small business offer?

We dug into the Zenefits database to see where small businesses stack up vs. the federal average when it comes to paid time off. To do this, we spent about a week (from 4/1-4/8/16) analyzing time off log data for ~50,000 employees at ~8,000 companies who used the Zenefits platform in 2015. The average company using Zenefits during this window of time has 24.7 employees. Companies referred from here on as “small businesses” adhere to this methodology.

Here’s what we learned about Zenefits customers and their time off policies:

  • The average small business using Zenefits to track time off offers 17.3 days of combined paid vacation and sick days and 11 paid holidays annually, for a total of 28.3 days off per year. That’s 1.3 days more than the national average of 27 days

How Much Time Off Offer?

  • The majority of small businesses offer 2-3 weeks of time off annually.

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  • Zenefits customers typically are more generous with their time off vs. the national average, especially as tenure increases.

By Tenure

  • Employees at small businesses in D.C. and Connecticut took, on average, about a week more time off than employees at small businesses in Michigan and Nebraska.


When do employees at small businesses take time off?

When companies offer more time off, how much is utilized by employees, and when? With strong seasonal patterns, employees at the sampled small businesses are more likely to take time around the end of the year and during the summer.


Full Week

  • July, August, October and December were the top months for vacations that spanned a full week or more.



  • Employees were most likely to take off in the summer months of June, July, and August, and at the end of the year in December.

Least Likely By Mont

  • January and February saw employees get back to the grind, taking fewer breaks during these winter months.


When is work getting done (or not) in the office?

During certain times of the year, 50% or more of employees are out of office. For those that remain, teams could be productive—or not. If you’re trying to decide when to set an all-company holiday, take a peek at the most popular times for the majority of workers to take a break.

  • 26% of companies saw at least 50% of employees take off between Christmas Eve (12/24) and New Year’s Eve (12/31).
  • 12% of companies saw at least 50% of employees take off during the week of Dec. 15th-23rd.
  • 5% of companies saw at least 50% of employee take off during the week of July 4th (7/3-7/10).

50% ooo

What’s the right time off policy for your business?

Unlimited or fixed, granted or accrued, flat or tiered, reset or rollover–there are certainly no shortage of options when it comes to paid time off policies out there today. Developing the right structure for your business is important, but the most important factor driving success of any policy comes down to how it’s implemented and managed. Without clear communication and tracking, admins and employees might seem at odds. But with the right tools, your team can take better advantage of time off and time in the office.

Get started crafting and administering an efficient time off policy today.


Deanna is the Director of Content Marketing at Zenefits, where she enjoys bringing our mission to 'make entrepreneurship easier' to life through programs that champion the voice of small businesses and empower them to thrive in today's economy.

Category: HR Tips & Trends, Time

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