Do you want to give your employees paid time off from work? If you choose to offer paid vacation days as an employee benefit, you might not know how many to provide. To stay competitive, take a look at the national average vacation time.

Benefits of paid vacation time 

Before we dive into the average vacation time for small business, let’s go over the benefits of offering it in the first place. 

With paid vacation time, employees receive their regular wages when they aren’t at work. This lets them spend time with their families, focus on their hobbies, or just take a break from work. 

Sounds great for your employees, right? Yes … but paid vacation time isn’t just good for employees. It’s also beneficial for your business, too. 

After taking time off, employees may be more:

• Productive
• Innovative
• Relaxed
• Engaged
• Balanced

And when employees are more productive, innovative, and engaged, your business’s bottom line goes up. Not to mention, offering the benefit could decrease employee turnover rates and increase employee satisfaction. 

OK, OK, you’re thinking about offering paid vacation time. Now, you may want to know how much is too much paid time off. 

Cue the average vacation time. 

Average vacation time 

Although you aren’t required to offer paid vacation time to your employees, the majority of companies do. According to the Bureau of Labor Statistics (BLS), 71% of private industry workers receive paid vacations. 

Many business owners, especially those who are new employers, struggle to create a vacation policy that is fair and reasonable. When determining your standard vacation policy, consider the average vacation days per year businesses nationwide provide. 

Take a look at these statistics from the BLS to get started. The statistics are grouped by the years of service the employee has with a business. 

The average paid vacation days per year for employees who have been with a business for 1-5 years is 10 days. 

Employees who have been with a business for 5-10 years receive an average of 15 days of vacation. 

The average number of vacation days employees who have worked at a business between 10-20 years receive is 17. 

And last but not least, employees who have been at a business for 20 or more years receive an average of 20 vacation days. 

Additional days off

In addition to paid vacation time, many businesses offer additional types of paid time off, such as holidays and sick time. 

Standard paid holidays 

According to the BLS, 79% of all private industry workers have access to paid holidays. However, you’re not legally obligated to give employees paid holidays. 

Your business’s industry may influence the number of workers who receive paid holidays. For example, only 56% of workers in service occupations receive paid holidays. On the other hand, 96% of management, business, and financial occupations receive paid holidays. 

So, are you thinking about giving employees paid holidays? If so, you may observe the federal legal holidays, which are:

• New Year’s Day
• Martin Luther King Jr. Day
• President’s Day
• Memorial Day
• Independence Day
• Labor Day
• Columbus Day
• Veterans Day
• Thanksgiving Day
• Christmas Day

Paid sick time

The majority of private industry workers (77%) have access to paid sick leave. 

In many states, offering paid sick time to employees is a choice. But if your business is in a state with paid sick leave laws, you must provide paid sick time. 

These are the states that currently have paid sick leave laws:

• Arizona
• California
• Colorado
• Connecticut
• Maine
• Maryland
• Massachusetts
• Michigan 
• New Jersey
• New Mexico
• Oregon
• Rhode Island
• Vermont
• Washington
• Washington D.C. 

Pay attention to the paid sick leave laws by state, which are growing in popularity. Don’t forget to factor these in when creating your business’s time off policy, too. 

Building your vacation policy 

You can use the average number of vacation days when coming up with your standard vacation policy for small business. Or, you can use it as a guide for developing a policy that fits your business. 

Keep in mind that the average vacation days by industry may vary. Not all industries offer the same number of paid vacation days. 

When creating your vacation policy, you may need to come up with additional rules. Here are a few examples of conditions you might set in your vacation policy:

• Employees must give you # days/weeks notice before taking paid vacation
• Employees cannot take off more than # days at a time
• No more than # employees can take off the same day 
• Employees can cash in # unused vacation days for money at the end of the year
• Employees can only carry over # days from year-to-year
• Employees must use paid vacation days or lose them at year-end (unless your state bans use-it-or-lose-it policies)

You might choose to lump vacation, sick, and personal days under one paid time off policy. With a paid time off policy, your employees have a fixed number of days they can use for any personal reason. Whatever you decide to do, add your policy to your employee handbook. 

Ready to offer your employees paid vacation days, sick time, and holidays? Patriot’s time and attendance software integrates seamlessly with our payroll software. With time and attendance, you can manage employee work schedules and track their time-off balances. Try both for free today!

This article has been updated from its original publication date of July 12, 2017.

This is not intended as legal advice; for more information, please click here.