definition of pto
Main article: Leave of absence. Paid time off or personal time off (PTO) is a policy in some employee handbooks that provides a bank of hours in which the employer pools sick days, vacation days, and personal days that allows employees to use as the need or desire arises. If PTO hours go unused, employees may sometimes call in sick near the end of the year so they can obtain the benefit of paid leave before it disappears. 2  Employers may counter this tendency by paying employees for some or all of their unused days at year-end or upon retirement or resignation.