Microsoft Teams Leave Management Guide

You're on Microsoft 365. Your team lives in Teams all day. So when someone wants a week off, it makes no sense to send them to a separate portal, make them remember another password, and then manually copy their name into a calendar nobody checks. The request should happen where the conversation already is.

This guide covers how to run leave (or annual leave, if you're in the UK) entirely inside Microsoft Teams with TimeLeaf: requesting time off, approving it without leaving a chat, syncing your people from Entra ID, and pushing Out-of-Office to Outlook automatically. It's part of our larger Slack and Microsoft Teams time-off guide, focused specifically on the Microsoft side.

How do you manage leave in Microsoft Teams?

You connect TimeLeaf to your Microsoft 365 tenant, and your team requests and tracks time off through Teams notifications instead of a separate app. Employees request any leave type you've defined in a few seconds, and managers get the request in Teams to approve or decline. The full leave engine still runs underneath; Teams is just the interface.

You define leave types and policies once (fixed or accrued allowance, monthly or anniversary accrual, carryover caps, advance-notice minimums, working-days and public-holiday calendars), then assign them per employee or in bulk. Employees can request vacation, sick, personal, parental, unpaid, bereavement, or jury duty. Requests can be single-day, multi-day, or half-day if you enable it. A balance is only deducted when a request is approved, not when it's submitted. And if someone cancels approved leave, the balance is restored. The rules and the math live in the same place they always have.

If you're still setting up the rules behind all this, start with how to set up leave policies. The policy structure is identical whether requests come in through the web app, Teams, or Slack.

How do you approve time off in Microsoft Teams?

When an employee requests leave, TimeLeaf sends an approval notification straight to the right manager inside Teams. They approve or decline from there, and the employee gets a confirmation message back. No portal, no email thread, no "did you see my request?"

Approvals route to the employee's direct manager by default, and fall back to HR if no manager is set. From there you can shape the workflow per leave type:

• Direct manager: the standard single approver.
• Multi-level: escalates to a second approver above a day threshold you set (so a 2-day request clears fast but a 3-week one gets a second look).
• Designated approver: a specific person owns a specific leave type.
• Auto-approve: for leave types that don't need a gate.

You can also set up approval delegation for date ranges, so when a manager is out, requests route to their cover instead of stalling. If a request sits too long, reminders fire after 48 hours and escalate after 5 days (both configurable). Multi-level approval is available on Professional and up; fully custom workflows are a Business-plan feature. If you also run shift teams, see how leave and rosters fit together in our shift scheduling and leave management guide.

Entra ID (Azure AD) directory sync: no manual employee setup

TimeLeaf connects to Entra ID (Azure AD) and pulls in your employees, teams, and org structure automatically, then re-syncs every 6 hours. You don't add people by hand, and you don't maintain a second copy of your org chart that quietly drifts out of date.

This matters most for growing teams. When you're hiring every month, manually adding each new person to a leave tool, and remembering to remove leavers, is exactly the kind of admin that gets skipped until something breaks. With directory sync, your people list mirrors your Microsoft 365 tenant. New hire in Entra ID, they show up in TimeLeaf. Read-sync covers everyone on Professional and up; write-back (pushing changes from TimeLeaf back to your directory) is an Enterprise capability.

Directory sync is also why approvals "just work." TimeLeaf already knows who reports to whom, so a request lands with the right manager without you wiring up reporting lines by hand.

Outlook calendar and automatic Out-of-Office replies

Approved leave can sync to Outlook as all-day calendar events, and TimeLeaf can optionally set an automatic Outlook Out-of-Office reply for the dates someone is away. So their calendar shows them out, and anyone emailing them gets the auto-reply, without the employee remembering to set either.

This closes the most common gap in time-off tooling: the leave is "approved" somewhere, but nobody's calendar reflects it and the person forgets to turn on their OOO. With the Outlook integration:

• Approved time off lands on the right Outlook calendar as an all-day event.
• The automatic Out-of-Office reply is optional, so turn it on per your needs.
• Your shared team calendar inside TimeLeaf still shows who's in, out, and upcoming, and you can sync it to Outlook or pull a public iCal feed for anyone who lives outside the Microsoft stack. Setup details are in the docs.

Outlook sync and the OOO automation are part of the Microsoft 365 integration, which is a Professional-plan-and-up feature.

Teams vs Slack: is the leave workflow any different?

The core workflow is the same on both: request, approval notification to the manager, confirmation to the employee, and a daily digest of who's off. The difference is in the surrounding Microsoft ecosystem features that only apply to Teams.

If your company runs on Microsoft 365, Teams gives you three things Slack doesn't: Entra ID directory sync, Outlook calendar sync with automatic Out-of-Office, and single sign-on with a Microsoft account. Slack, by contrast, has its own strengths: interactive approve/decline DMs, an optional team absence channel, and a daily digest (default 8:00 AM). Both match users to employees by email, and both are Professional-plan features. Pick the one your team already lives in. If you're weighing the whole stack for a smaller team, our PTO tracking guide for small business walks through what to prioritize.

SSO with a Microsoft account

Yes. Employees sign in to TimeLeaf with their existing Microsoft account. There's no separate password to create, reset, or forget, and offboarding through your directory removes their access the same way it removes everything else.

This is the quiet win of staying inside the Microsoft ecosystem. People hate one more login, and shadow accounts are a security liability. With Microsoft SSO, access follows your existing identity setup. SSO (including SAML) is available on Professional and above, alongside the rest of the security baseline: AES-256 encryption at rest, TLS 1.2+ in transit, per-tenant data isolation, role-based access control, audit logs retained for 12 months, and GDPR tools on every plan.

What you need to connect Teams (Professional plan and up)

The Microsoft 365 integration (Teams notifications, Entra ID sync, Outlook calendar, OOO, and Microsoft SSO) lives on the Professional plan ($90/mo) and above. The Starter plan ($50/mo) covers leave management, the team calendar, email notifications, CSV export, blackout periods, and GDPR tools, but not the Teams connection.

Here's the short version of what you'll set up:

1. Pick a plan with the integration. Professional or higher. Each plan includes 10 employees, then a flat per-extra-employee rate, with roughly 10% off on annual billing. See pricing for the full breakdown.
2. Connect Microsoft 365. Authorize the Entra ID directory sync so your people, teams, and org structure flow in (re-syncing every 6 hours).
3. Set your leave policies and approval routes. Define types, allowances, accrual, carryover, and who approves what.
4. Turn on Outlook sync and OOO. Decide whether approved leave writes to Outlook calendars and whether automatic Out-of-Office replies are set.

Most teams are live in under 30 minutes. Every plan comes with a 7-day free trial (a credit card is required to start), so you can connect your real Microsoft 365 tenant and watch a request flow through Teams before you commit. The full step-by-step lives in our docs.

If your company already runs on Microsoft and you're tired of leave living in a spreadsheet next to a calendar nobody updates, putting the whole workflow inside Teams is the obvious move. Start a trial and connect your tenant.