Floating Holidays: Meaning, Benefits, Considerations
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What is a Floating holiday?

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A floating holiday is a flexible paid day off that employees can use at their discretion, in contrast to conventional fixed holidays that are set on specific dates (like Christmas or Independence Day). 

The concept behind floating holidays is to accommodate diversity within the workplace by allowing employees to take time off for personal reasons, or events that are significant to them but are not officially recognized as public holidays.

On a deeper level, the policy acknowledges the varying backgrounds and needs of employees, which aids in promoting inclusiveness and flexibility.

It is also critical to note that floating holidays can vary by organization in terms of how they are scheduled, the notice period required, and any limitations on when they can be taken.

 They are typically part of an employee’s benefits package and are subject to the company’s policy regarding accrual and usage.

The Two-fold Advantage of Floating Holidays

Floating holidays offer a plethora of benefits for both employers and employees, as listed below -.

  • Allows employees to take time off based on personal or cultural needs.
  • Acknowledges and respects workforce diversity.
  • Boosts overall happiness and mental health.
  • Leads to higher job satisfaction.
  • Makes organizations more appealing to potential employees.
  • Boosts employee commitment and productivity.
  • Helps prevent employee burnout.
  • Encourages a healthier work-life balance.
  • Signals a commitment to supporting employees’ diverse needs.
  • Aids in retaining employees.

Understanding the Process

The implementation of floating holidays involves several key components to ensure clarity and fairness for all parties involved.


Typically, employers allocate a certain number of floating holiday(s) per year to each employee. The number can vary based on company policy, often ranging from one to three days. These are in addition to regular vacation days and public holidays, which offer additional flexibility.

Requesting and Approval

To take a floating holiday, employees usually need to request the day off in advance. This is subject to approval by their manager. This process helps ensure that taking these days does not negatively impact business operations. 

Companies often use existing leave management systems to track floating holiday requests just as they would vacation or sick days.

Policies and Restrictions

Companies must establish clear policies regarding the use of floating holidays, including any deadlines for use within the calendar or fiscal year. This will help prevent end-of-year rushes that could significantly disrupt business operations. 

Some companies may also follow a use-it-or-lose-it approach. Meaning, floating holidays cannot be carried over to the next year.

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Implementing a Floating Holiday Policy? What to Know

Below, we have outlined some of the key things you need to know before implementing a floating holiday policy in your organization.

1. Definition and Purpose

Understand what a floating holiday is and its purpose in promoting flexibility and inclusivity in recognizing diverse cultural and personal significance.

2. Eligibility Criteria

Clearly outline who qualifies for floating holidays in your organization. Consider whether they are available to all employees or only to those who meet certain criteria.

3. Accrual and Usage Rules

Decide how floating holidays will accrue and the rules around their usage. This might include how many days employees are entitled to, how often they accrue, and any limitations on how they can be used.

4. Notice and Approval Process

Establish guidelines for how far in advance employees must request to use their floating holiday and the process for approval. Ensure this process supports both the employee’s and the organization’s planning needs.

5. Carryover and Payout Policies

Determine whether floating holidays can be carried over into the next year if unused and if employees will be paid out for unused days upon leaving the company.

6. Impact on Operations

Assess how floating holidays might impact your operations, especially if many employees choose to take their days off around the same time. Consider developing strategies to manage these periods without affecting productivity.

7. Cultural Sensitivity

Be mindful of the diverse backgrounds of your workforce. Ensure the policy is inclusive and does not indirectly privilege one group over another.

8. Communication Plan

Develop a clear communication plan to inform all employees about the new floating holiday policy. This should include educational materials or sessions to explain the details and benefits of the policy.

9. Integration with Existing Leave Policies 

Review and possibly adjust your existing leave policies to ensure that the addition of floating holidays complements rather than complicates your overall leave management.

10. Monitoring and Feedback

Establish a system for monitoring the policy’s impact and gathering employee feedback. Be prepared to make adjustments based on practical experiences and evolving needs of the workforce.

11. Legal Compliance

Ensure that your floating holiday policy complies with all relevant labor laws and regulations in your jurisdiction. This might involve consultations with legal experts to avoid any unintended legal complications.

Execute Effective Policies in Your Organization with Expert Assistance 

Floating holidays are more than just a day off. They are a reflection of a company’s commitment to celebrating diversity and supporting individuality. Adapting policies to accommodate the wealth and variety of cultures and beliefs present in the workforce, will not only enhance employee engagement but also help you stand out. 

You can further optimize the benefits of effectively implementing multivarious policies in your organization by collaborating with a reputed global talent acquisition and payroll management expert – Tarmack

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