How to Set Up Custom Leave Types 🏝️
Hi community, I want to share a bit about the custom leave types that we see and use every day (or every off day to be exact). We should not treat PTOs like a jack of all trades. By categorizing different leave types, we can better understand the problem why each member is getting a day off and possibly identify what went wrong.
As a manager, one of your core responsibilities is ensuring that your team operates smoothly — not just in project delivery, but also in how time off is managed. Leave management may seem administrative at first glance, but in reality, it directly impacts productivity, morale, compliance, and workforce planning.
Most leave management systems start with standard categories such as Annual Leave and Sick Leave. While these may work for smaller or more traditional organizations, they quickly become limiting as your company grows, diversifies, or adopts more flexible work policies. This is where understanding and knowing how to set up custom leave types come in handy.
Why? Because different teams have different needs, and different countries have different regulations. Besides, modern workplaces increasingly support employee well-being initiatives that don’t fit neatly into generic leave categories.
What are the common custom leave types?
Custom leave types are leave categories tailored specifically to your organization’s policies, culture, and compliance requirements. They go beyond the default “Annual Leave” and “Sick Leave” structure.
From a managerial perspective, these categories help you more accurately reflect reality in your reporting and planning.
Here are some common examples of custom leave types you may find available:
- Personal & Wellness Leave: Many organizations now create specific leave types, such as Mental Health Leave, Wellness Days, or Personal Emergency Leave, to promote transparency and remove stigma.
- Work Arrangement–Related Leave: With hybrid and remote work models becoming standard, companies often create leave types like Work From Home (WFH) Leave, Remote Work Day, or Half-Day Leave. These categories help managers track availability accurately without categorizing flexible arrangements as “absence”.
- Company-Specific Leave: Some leave types are unique to your company culture or internal policies, including Volunteer Leave, Study Leave, Marriage Leave, or Bereavement (Compassionate) Leave.
- Compliance & Regional Leave: This category includes custom leave types such as Maternity Leave, Paternity Leave, Parental Leave, Jury Duty, or Military Leave, when compliance becomes more complex.
As a result, separating these categories helps ensure accurate reporting and compliance documentation. It also protects both employees and the organization in case of audits or disputes.
Remember: custom leave types reflect how your organization truly operates — not just how a generic system defines leave.
Why use custom leave types to manage PTO?
Before diving into the specific benefits, it’s important to understand that custom leave types are not just administrative labels — they are strategic tools that help you manage PTO with greater clarity, accuracy, and control.
1. Better policy alignment
Your HR policies define how leave should work. Custom leave types ensure your system reflects those policies accurately.
Without customization, teams may:
- Use sick leave for personal emergencies
- Mix parental leave with annual leave
- Misclassify flexible work arrangements
Over time, this creates inaccurate data and confusion.
Therefore, custom leave types eliminate ambiguity. Each request clearly matches a policy category, reducing administrative back-and-forth and improving transparency.
2. Improved reporting and workforce planning
From a management standpoint, reporting is critical.
When leave types are clearly categorized, you can:
- Identify trends (e.g., high sick leave usage in certain teams)
- Forecast staffing shortages
- Understand seasonal absence patterns
- Measure engagement initiatives like volunteer programs
For example, if you introduce Mental Health Leave and see consistent usage, it may indicate healthy adoption of well-being initiatives. Alternatively, spikes could signal workload stress.
Without proper categorization, these insights remain hidden.
3. Clearer employee experience
Employees appreciate clarity. When they request leave, they should know exactly what category applies.
Clear leave types help:
- Reduce confusion
- Increase confidence in the process
- Decrease approval delays
- Improve trust in management systems
Therefore, a well-structured leave system signals organizational maturity and fairness.
4. Flexible PTO strategy
Organizations evolve. Policies change. Teams expand.
Custom leave types allow you to adapt without disrupting the entire leave structure. You can introduce new categories, adjust quotas, or refine eligibility as business needs shift.
From a strategic management perspective, flexibility is not optional — it’s necessary.
How to set up custom leave types for your organization
Now let’s move into practical implementation. To set up custom leave types for your teams, you will need to get a capacity planning or time tracker first. And TimePlanner is perfect for that. It allows managers to track employees’ workload and ensure they are working at their full capacity.
When using TimePlanner, setting up custom leave types is straightforward, but it requires clarity in your internal policies first. Before configuring anything, ensure that your HR guidelines clearly define eligibility criteria, paid vs. unpaid status, accrual rules, and approval workflows.
Step 1: Navigate to the Leave settings
After installing Teamboard TimePlanner, access the app with Admin permissions. From the left sidebar menu, locate Settings and choose Leaves.
Then, in the main settings interface, you can scroll down to find the Leave types. By default, there are 4 most common leave types: Paid, Unpaid, Sick, and Other, ready to be used.
But of course, we are here to set up new custom types.
Step 2: Create a new leave type
You can click the Add new button sitting on the same line as the Leave types. Then, there will be a prompt allowing you to configure the leave type’s basic details:
- Leave name
- Description
- Pay percentage
- Allocation target
Again, you should choose a clear, descriptive name for each custom leave type to avoid any misunderstandings among your employees. Besides, you should conduct a meeting with your HR and other stakeholders to specify the pay percentage applicable for this leave type (e.g., 100% means fully paid leave).
Additionally, you should also decide if that type can be counted against the total allocated leave days in your organization by toggling the Allocation target.
Step 3: Configure leave rules
Once you’ve added new leave types for your teams and employees, it is recommended to check the rules for requesting PTO.
Depending on the leave type, you can configure:
- Allocation Days: the number of PTO allowed per year.
- Allow accumulation: This is also known as the Carry-over rules, allowing employees to carry unused PTO over to the next year.
Additionally, you can also set up different leave allocation rules for a specific employee or a group of employees.
For example, interns with fewer contractual obligations may be subject to different PTO policies than core employees.
Step 4: Save and test
With all that done, the custom leave types are now available for testing. You can try to submit a test leave request using this leave category and complete the approval process.
Once approved, you should verify that the leave balance is deducted correctly and that the request appears accurately on the team calendar.
Finally, check the availability view to ensure the employee is marked as unavailable (or partially unavailable for half-day leave). This confirmation ensures that your leave type is functioning properly and reflects accurately in resource planning.
Every organization is different, and your leave management system should reflect that. Custom leave types allow you to shape your PTO structure in a way that truly matches your policies, culture, and operational needs.
When leave categories are clear and well-defined, everyone benefits — employees feel confident submitting requests, and managers gain accurate visibility for planning and decision-making.
With TimePlanner, setting up custom leave types is simple and flexible. By taking the time to configure them thoughtfully, you create a leave system that feels fair, transparent, and easy to manage — something both your team and your leadership will appreciate.
Was this helpful?
Thanks!
Lucas_DevSamurai_
1 comment