What is paid time off (PTO)? Statutory leave, by country

PTO is a US-born HR term, and it means something a little different once you hire outside the US. This page defines it, then covers how it actually works, why the distinction matters to an employer, and how the statutory floor compares by country. For the full country-by-country entitlement, see annual leave by country and public holidays by country.

Last updated August 6, 2026. Jump to: What it is · How it works · Why it matters to employers · Statutory leave by country · Common mistakes · How Remote& handles it · FAQ

What is paid time off (PTO)?

"PTO" started as a US convention: instead of tracking vacation days, sick days, and personal days as separate pools, a company pools them into one bank of paid days an employee can use for any reason. That single-bank model is common in the United States but far less common elsewhere. Most countries outside the US legally separate leave into distinct categories, each with its own statutory minimum:

• Annual (vacation) leave — the statutory minimum paid time off for rest, set by law in almost every country.
• Sick leave — paid absence for illness, usually a separate legal entitlement with its own rules on medical certification and pay level.
• Public holidays — fixed national or regional dates the whole workforce gets off, counted separately from annual leave in most countries. See public holidays by country.
• Parental leave — maternity, paternity, and other family leave, again its own category with its own rules. See maternity & parental leave by country.

How paid time off actually works

How PTO accrues and gets used varies by policy and by country:

• Accrual method. Some employers grant the full annual entitlement upfront on the first day of the year; others accrue it monthly or per pay period, so the balance builds gradually as the employee works.
• Carryover. Whether unused days roll into the next year, expire, or get capped at a maximum balance is set by company policy — though several countries set a legal minimum carryover an employer cannot simply override.
• Payout on termination. Many countries legally require unused statutory leave to be paid out in cash when an employee leaves, regardless of company policy. This is one of the most commonly overlooked costs at offboarding.
• "Unlimited PTO." A policy with no fixed day count is a US convention and does not remove a statutory minimum elsewhere — the legal floor still applies wherever the employee is actually based.

Why PTO matters to employers

Two separate things are at stake for an employer: competitiveness and compliance. On the competitive side, a leave policy is one of the more visible parts of an offer, and expectations differ sharply by market — a package that reads as generous in the US can read as thin against the statutory floor in much of Europe. On the compliance side, statutory leave is a legal entitlement, not a perk, and getting the entitlement or the termination payout wrong is a real exposure.

There is also a budgeting angle that is easy to miss: unused accrued leave is a real liability sitting on the books, not a free pass. It becomes a cash cost the moment an employee leaves in a country that requires a payout. Our total employer cost of hiring abroad guide covers how leave accrual fits into the full cost picture.

Statutory paid annual leave by country

The table shows the statutory minimum paid annual leave — the core of what most countries legally require, separate from sick leave and public holidays — for eight countries, reused from our annual leave by country data, checked July 2026.

Source: our country guides, checked July 2026. Sick leave, parental leave, and public holidays are separate legal categories in most of these countries — see each country guide for the full picture.

Common PTO mistakes

• Rolling out one PTO policy company-wide. A 15-day US-style PTO bank can sit below the statutory minimum the moment it is applied to an employee in France or Brazil.
• Treating "unlimited PTO" as removing the legal floor. It does not — the statutory minimum still applies, and in some countries an undefined policy can create ambiguity that is itself a compliance risk.
• Folding public holidays into the annual leave count where the law keeps them separate. Several countries count the two pools independently; conflating them understates what the employee is legally owed.
• Missing the termination payout. Unused statutory leave is a legally required cash payment in many countries, and it is easy to underbudget at offboarding if it is not tracked as an accruing liability.

How Remote& handles paid time off

Remote& tracks the statutory leave entitlement for each country automatically, so a company's policy is checked against the local legal floor rather than applied blind. Accrual, carryover, and the termination payout calculation are handled per country, on the same worker record whether the person is an EOR employee or a contractor.

See global workforce management for how leave sits alongside payroll and contributions on one platform.

Frequently asked questions

What does PTO stand for and what does it mean?

PTO stands for paid time off. It originally described a US practice of pooling vacation, sick, and personal days into one bank of paid days an employee can use for any reason. Outside the US, the term is often used more loosely to mean any paid leave, even where the law separates it into distinct categories like annual leave and sick leave.

Is PTO the same as annual leave?

Not exactly. Annual leave is a specific, legally defined statutory entitlement in most countries. PTO is a broader, company-defined term that can bundle annual leave with sick leave and other paid absence into a single pooled bank — a structure that is common in the US but not the legal norm elsewhere.

Is unused PTO paid out when an employee leaves?

In many countries, yes — unused statutory annual leave must legally be paid out in cash when employment ends, regardless of what the company's own policy says. The rule and the calculation method differ by country, so it is worth checking the specific country's requirement before offboarding.

Do public holidays count as PTO?

Usually not as a separate deduction from an employee's leave balance. Most countries treat public holidays and annual leave as two distinct legal pools, though a few, like the UK, fold bank holidays into the headline annual leave figure instead. Check the specific country before assuming either way.

How much statutory PTO do employees get in different countries?

It varies widely. Statutory paid annual leave runs from around two weeks in some countries to 30 days or more in others — France sits at 30 working days, while Canada's federal minimum is 2 weeks. Public holidays, sick leave, and parental leave are usually separate entitlements on top.

How does Remote& handle PTO for a global team?

Remote& tracks each country's statutory leave entitlement automatically and checks a company's policy against that local floor rather than applying one global rule. Accrual, carryover, and termination payout are calculated per country, on the same worker record as payroll and contributions.