Career

Unlimited holiday: why some companies offer it to staff

Rive News Research Desk

Published October 28, 2026 · 9 min read

By Rive News / Research desk | Rive News / Published October 28, 2026 at 9:00 AM PKT

Key takeaways

Companies offer unlimited holiday to signal trust, attract talent, and stop tracking leave allowances.
Removing accrued leave also removes a balance-sheet liability, since unused days no longer have to be paid out when staff leave.
Staff on unlimited policies often take less leave than colleagues with fixed allowances, not more.

[A beach holiday destination in the Caribbean.] Photograph: beach holiday

Image Credits: Wikimedia Commons

Unlimited holiday sounds like one of the most generous perks an employer can offer. Instead of a fixed allowance, such as 25 days a year, staff take the time off they need, with no cap and no running total to track.

The reality is more mixed. Companies adopt the policy for several different reasons, and not all of them are about generosity. This article explains why employers offer unlimited holiday, what the policy does to the company's books, and why staff on unlimited leave often end up taking less time off than their colleagues.

What unlimited holiday actually means

Under a standard policy, each employee has a set number of paid days per year, and unused days may carry over or be paid out on leaving. Under an unlimited policy, there is no set number. Staff request time off as they need it, subject to their work being covered and their manager agreeing.

That does not mean staff can take 365 days off. Every unlimited policy has practical limits: cover must be arranged, busy periods are protected, and managers still approve requests. BreatheHR's account of the policy at NORI HR & Employment Law describes a rule that no two team members can be off at the same time, which shows how "unlimited" works in practice.

The policy also changes what happens when someone leaves. With a fixed allowance, unused days are owed to the employee. With unlimited leave, there is no balance to pay out, because no days were ever accrued.

The trust and recruitment story

The public story employers tell is about trust and autonomy. CharlieHR, which ran unlimited holiday from its founding in 2015, says the reasoning was simple: the company cared about what people delivered, not what an arbitrary number on a spreadsheet said about them. Its founders wanted staff to take the time they needed to do good work.

That philosophy has a famous origin. Netflix's former chief talent officer Patty McCord is widely associated with the idea of treating staff as fully formed adults who do not need detailed rules if they are hired well. CharlieHR cites her approach as an influence, and Netflix's "Freedom and Responsibility" culture remains the best-known example of the model.

Recruitment is the second part of the story. Indeed UK notes that extra holiday is a popular perk, citing research by Small Business Prices in which 26.28% of employees said they would value additional holiday over a pay rise. An unlimited policy is a striking headline in a job advert, and it signals a modern, flexible workplace.

Trust also matters for day-to-day working. Indeed UK argues that giving staff independence over their leave builds engagement, because employees feel respected and valued. The policy removes small frictions, such as tracking half-days for appointments, and lets managers judge people on output instead.

The accounting reason employers rarely mention

There is a second, quieter reason, and it concerns the company's balance sheet. When staff earn fixed leave, those unused days count as a liability: money the company owes. Fast Company explains that when a company switches to unlimited leave, it drops the accrued policy, so the liability disappears and the company instantly looks more valuable.

The Financial Times reported in November 2017 that a large firm ditching fixed paid leave for open vacations can wipe millions of dollars of unused leave liabilities from its books. Those liabilities would otherwise be paid to departing employees. SHRM's coverage makes the same point, quoting analysts who say some organisations adopted the benefit partly to avoid paying workers for unused days when they left.

Kitces, writing about advisory firms, sets out the same logic from the employer's side. With a single-bank paid-time-off system, an employee who has accumulated 20 days when they depart is owed payment for that time, which creates a cash-flow risk. Unlimited leave removes that obligation entirely, along with the administration of tracking accruals.

This does not mean every unlimited policy is an accounting trick. Many employers adopt it with genuine intentions, as SHRM's reporting acknowledges. But candidates should understand that the policy can serve the employer's finances as well as its culture, and that the two motives often sit side by side.

Why staff often take less leave

The most counterintuitive finding about unlimited holiday is that it can reduce the amount of leave people take. SHRM cites the 2017 HR Mythbusters report by Namely, which found that employees offered unlimited vacation took an average of 13 days off a year, while workers with capped allowances took an average of 15 days.

Several reasons explain the gap. Without a fixed allowance, there is no clear norm for how much leave is acceptable, and staff worry about looking less committed than colleagues. SHRM quotes analysts who point to guilt about being away, and to workplaces where senior leaders take little leave themselves, which sets an unspoken ceiling.

CharlieHR's own experience illustrates the problem from the inside. After three years of unlimited holiday, the company found that most people did the opposite of abusing the policy: they took less time off than expected, and the lack of a clear allowance made it harder to spot who needed a break. The company eventually concluded that the policy had failed its own staff, not because people took too much leave, but because the system gave them no signal for what was normal.

The pattern is not universal, and some companies set minimum leave requirements to counter it. But the data suggests that "unlimited" only works when managers actively encourage leave and model it themselves.

How common is unlimited holiday

Unlimited leave remains a minority policy, though it is growing. An older case study of unlimited vacation policies put the share of companies offering some form of it at less than 1%. More recent data points the other way: Kitces cites Mercer's annual Absence and Disability study, which found that the share of companies offering unlimited leave to at least some employees jumped from 20% in 2021 to 32% in 2024.

The growth is concentrated in white-collar and remote-friendly roles, where work can be covered flexibly. It is far harder to run in roles that need fixed staffing, such as retail shifts or production lines, where one person's absence directly leaves a gap.

What to check before accepting an unlimited policy

Candidates should look past the headline and ask practical questions. The most important is whether there is a minimum leave expectation, and whether managers track it. A company that requires, say, 15 days a year is signalling that it genuinely wants staff to rest.

Ask how requests are approved and what happens in busy periods. A policy that works well in quiet months but blocks leave whenever the business is busy is less generous than it sounds. Ask too whether the policy covers all staff or only some grades, since a perk that applies only to senior roles tells you something about the company's priorities.

Finally, look at what senior leaders do. If the chief executive takes four weeks a year and talks about it, staff will feel safe doing the same. If leaders never take leave, the policy's promise is unlikely to survive contact with the culture.

[A professional walking through a modern office.] Photograph: office professional

Image Credits: Wikimedia Commons

Frequently asked questions

Does unlimited holiday mean I can take as much leave as I want?

No. In practice, leave still needs manager approval and work cover. The policy removes the fixed cap, but workload, team cover, and busy periods all limit how much leave staff can realistically take.

Do I lose unused holiday pay when I leave an unlimited policy?

Yes, in most cases. Because no days accrue under an unlimited policy, there is usually no balance to pay out on departure. That is one of the main differences from a fixed allowance, and one of the reasons employers adopt the policy.

Is unlimited holiday better than a fixed allowance?

It depends on the culture. A fixed allowance of 25 or 30 days with a clear right to take it can beat an unlimited policy in a workplace where nobody feels able to take leave. The Namely data showing 13 days against 15 days for capped workers is a useful warning.

Which companies offer unlimited holiday?

Netflix is the best-known pioneer, and Virgin, HubSpot, and Best Buy have all used versions of the policy. Mercer data cited by Kitces puts the share of companies offering it to at least some staff at 32% in 2024, up from 20% in 2021.

The bottom line

Companies offer unlimited holiday for a mix of reasons. The public reasons are trust, autonomy, and recruitment appeal, and those motives are real in many workplaces. The quieter reason is financial: removing accrued leave takes a liability off the books and ends payout obligations when staff leave.

For employees, the policy is only as good as the culture behind it. Where managers encourage leave and take it themselves, unlimited holiday can deliver real flexibility. Where leave is unlimited in name only, a fixed allowance with a clear right to use it is often the better deal.

Tags: unlimited holiday, paid leave, workplace benefits, work-life balance

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