The best approach to take regarding vacation benefits is accrued. If you give employees non-accrued vacation and they quit or get fired, most states require that you pay them out for all of the vacation you have given them. If the vacation is accrued, you only have to pay them for what they have earned. This will reduce any overhead costs associated with employee turnover, when it happens, and you are adding to the bottom line. You might also want to to consider doing Paid Days Off (PDO) rather than categorizing vacation from sick time and personal time. Again, you have to pay them for all of that. Plus it makes your job less difficult by not having to track all of those categories for all your employees. Accrued PDO is such a common policy these days that most employees don’t bat an eye at it as long as it’s a fair amount of days your are allowing them to accrue. You might want to research what your state says about vacation payout for former employees before you make a final decision.