How Much PTO Should You Offer? Benchmarks by Industry

The most common PTO offer in the US is 10 to 15 paid vacation days for employees in their first few years, climbing to 20 or more after a decade of service. If you're a small business and you offer 15 days of vacation plus a separate handful of sick days, you're competitive with most employers. The harder question isn't the average; it's what number fits your team, your budget, and your state's rules. This guide gives you the benchmarks by tenure and industry, then walks through how to land on a defensible number.

The quick answer: US PTO averages by tenure

Paid time off in the US scales with how long someone has been with you. According to long-running data from the Bureau of Labor Statistics, the average number of paid vacation days for private-industry workers looks roughly like this:

A few things to read carefully here. First, these are vacation days only. BLS tracks vacation, paid sick leave, and paid holidays as separate benefits. So a company that advertises a single 15-day PTO bank covering both vacation and sick time is actually below the combined average once you add the typical 7 to 8 sick days most employers grant.

Second, paid holidays are on top. The average US worker gets 7 to 8 paid holidays a year (New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, the day after, and Christmas is a common set). Holidays are almost never counted inside a PTO number, so don't let them muddy your benchmarking.

Third, the median lags the average. A handful of generous tech and professional-services firms pull the average up. The typical new hire at a small or mid-size company gets 10 days, not 11.

Benchmarks by industry

Industry matters more than almost any other factor. A reasonable offer in hospitality would look stingy in software. Here's how starting PTO (vacation, for a new hire) tends to break down across sectors:

The headline takeaway for a small business: figure out which of these buckets you actually compete with for talent. A boutique marketing agency competes with tech and professional services, so 10 days will feel thin. A landscaping company competes with trades and retail, where 10 days is generous.

Where unlimited PTO fits

Unlimited or "open" PTO is concentrated in tech and knowledge work. It sounds generous, but the data is mixed: studies repeatedly find that employees with unlimited PTO take fewer days on average than those with a fixed allotment, because no one wants to look like the person who takes too much. If you go unlimited, set a floor (for example, "everyone is expected to take at least 15 days") to get the recruiting benefit without quietly shrinking how much rest people get. Unlimited also removes the payout liability when someone leaves, which is the real reason many CFOs like it.

How to set a competitive number in five steps

Benchmarks tell you the field. Here's how to pick your own number.

1. Identify your real competition for talent. Not your industry on paper, the companies your candidates actually weigh against you. Pull three or four recent job offers your people considered and look at their PTO.
2. Pick a target percentile. Matching the median (around 10 to 12 days starting) keeps you from being a dealbreaker. Beating it (15 to 18 days) makes PTO a recruiting asset. Decide which you can afford.
3. Decide bundled vs. split. If you operate in a state with mandated sick leave, you likely need a separate sick bucket, so quote vacation and sick separately. Otherwise a single bank is simpler to administer.
4. Design the tenure ladder. A clean, common structure: 10 days at hire, 15 at year three, 20 at year five, 25 at year ten. This rewards loyalty while keeping your starting cost low.
5. Price it. Multiply added days by your average daily wage across the team to see the real cost before you commit.

A worked example

Say you run a 12-person agency. Average salary is 65,000 dollars, which is about 250 dollars per working day per person. You currently offer 10 vacation days and want to move to 15 to compete with larger agencies.

That's 5 extra days per employee per year. Across 12 people that's 60 additional days. At 250 dollars a day, the direct wage cost is about 15,000 dollars a year if all the time is taken and none of the lost output is recovered. In practice, salaried work usually gets absorbed rather than fully lost, so the true cost is lower, but 15,000 dollars is your conservative ceiling. Compared with the cost of losing and replacing one mid-level employee (often 50 to 100 percent of their salary), an extra week of PTO is cheap retention insurance.

You can run your own version of this math with our PTO cost calculator, and figure out how many working days a given policy actually spans using the working days calculator.

Don't forget accrual mechanics

The number of days is only half the policy. How employees earn those days shapes both cost and fairness.

• Lump-sum (front-loaded): the full balance is available on January 1 or the work anniversary. Simple and popular, but you may owe a payout for unused time and you carry risk if someone takes all their PTO in February and quits in March.
• Accrual: time is earned gradually, often per pay period. A 15-day policy accrues at about 4.6 hours per biweekly paycheck. This limits your exposure and is the standard for hourly teams.
• Carryover and caps: decide whether unused days roll over, expire, or get paid out. A common compromise is allowing carryover up to 1.5x the annual accrual, with a hard cap to prevent runaway balances.

If you're moving to an accrual model, our PTO accrual calculator shows exactly how much an employee earns per period for any annual allotment. And when you're ready to put it in writing, the PTO policy generator produces a clean policy document you can hand to your team.

Common mistakes when setting PTO

A few traps catch small businesses repeatedly:

• Comparing a combined bank to a vacation-only benchmark. This makes your offer look better than it is and leads to surprised, under-rested employees.
• Ignoring state sick-leave mandates. A growing list of states and cities require a minimum amount of paid sick time. A single PTO bank can technically violate these rules even if your total days are generous, because the law cares about how the sick portion is treated (accrual rate, carryover, reason for use).
• No tenure ladder. Offering a flat 12 days forever gives a 10-year veteran the same deal as a new hire, which quietly signals that loyalty isn't valued.
• No cap or carryover policy. Unlimited rollover creates large balance liabilities that can become a real cash problem when several long-tenured people leave in the same year.
• Setting the number and never revisiting it. The market moves. Re-benchmark every couple of years, especially after a tight hiring stretch.

So what should you offer?

For most small businesses, a strong, affordable starting point is:

• 15 days of vacation for new hires (or 18 to 20 if you compete with tech and professional services).
• A separate sick-leave bucket sized to meet or beat your state's mandate, commonly 5 to 8 days.
• A tenure ladder that reaches 20 to 25 vacation days by year ten.
• Clear accrual and carryover rules so the cost is predictable.

That package lands you at or just above the US median, signals that you take rest seriously, and stays within reach for a team running on a real budget. If you operate in a low-PTO industry like retail or trades, even 10 days with a clear ladder will set you apart from competitors offering five.

Once you've picked your number, the hard part is tracking it: who's accrued what, who's carried over, and who's about to hit a cap. That's what SimplyPTO is built for. It handles accrual, carryover caps, and approvals automatically so your policy actually runs the way you wrote it. Start a free trial and turn your benchmark into a working policy in an afternoon.