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# Setting up time off policies

Time off policies determine how many days off employees receive, how those days are accrued and what happens to unused days at the end of the year. You set this up via **Company settings → Time off policies**.

### What's already set up?
When you create a Heartwork account, we automatically add the statutory time off policy based on the country you entered during registration. For most European countries this is the statutory minimum number of holiday days. You only need to adjust this policy if your own arrangements differ from the statutory basis.

### Editing an existing policy
Click the three dots next to an existing policy and choose **Edit**. Make your changes and save with **Update policy**.

### Creating a new time off policy
Click **Add policy** in the top right to create a new policy. You'll go through the following settings:

**Policy name and time off type**
Give the policy a clear name, for example "Statutory holiday days" or "Extra-statutory holiday days". Then choose the time off type, such as Holiday or Training.

**Entitlement**
Choose between two options:
* **Limited** — employees are entitled to a fixed number of days per year.
* **Unlimited** — employees are entitled to unlimited time off.

**Annual entitlement and accrual frequency**
Enter the number of days per year. In the Netherlands the statutory minimum is 20 days for full-time employees. Then choose how days become available:
* **Annually (upfront)** — all days are immediately available on the first day of the policy year.
* **Monthly (in arrears)** — days are gradually accrued throughout the year. Useful if you don't want to pay out too much when someone leaves early.
Enable **Apply pro-rata** if you want the number of days to be automatically adjusted for employees who start mid-year or work part-time.

**Start date of the policy year**
Set when the new policy year begins. For most companies this is January 1.

**Carry-over of unused days**
By default, unused days expire at the end of the policy year. If you want to allow carry-over:
1. Check **Allow carry-over**.
2. Set an expiry date, for example 6 months after the end of the policy year. This prevents carried-over days from accumulating indefinitely.
3. Optionally check **Limit carry-over** to set a maximum on the number of days that can be carried over.

**Assigning to employees**
You can manually assign a policy to individual employees, or enable **Automatically assign to new employees**. In that case everyone you invite will automatically receive this policy.

Click **Create policy** to save.

||| Warning: Changes to a policy apply immediately to all employees the policy is assigned to. Make sure to review everything carefully before saving.