Microsoft Teams Leave Management: Setup 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 marking approved leave as Out of office on Outlook automatically. It's part of our larger Slack and Microsoft Teams time-off guide, focused specifically on the Microsoft side.

TimeLeaf's leave management works the same way in Slack and Google Chat.

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, gradual accrual by the week, month or quarter or a full grant at the start of the leave year, 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. 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 go up the fallback chain to an admin if none is assigned. From there you can shape the workflow:

• Direct manager: the standard single approver.
• Multi-level: adds 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).
• Named approver: a specific person owns a specific leave type.
• Auto-approve: leave types that don't need a gate are approved when submitted.

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, you can have the next approver up the chain told after a number of hours you set (off until you set it). Multi-level approval is available on Professional and up; named approvers 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.

The manager side is covered step by step in how to approve time off in Microsoft Teams.

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 with a click of the Sync Directory button on the Employees & Teams page. 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 — sync runs whenever you trigger it, not on a timer.

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. TimeLeaf syncs once a day: a new hire in Entra ID shows up in TimeLeaf, and someone disabled or removed there is archived (with a list for an admin to review, and a safety stop so a broken connection never archives your whole company). 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 sync

Approved leave can sync to Outlook as all-day calendar events, shown as Out of office — so the calendar itself shows them out, without the employee remembering to set anything.

This closes the most common gap in time-off tooling: the leave is "approved" somewhere, but nobody's calendar reflects it. With the Outlook integration:

• Approved time off lands on the right Outlook calendar as an all-day event, marked Out of office.
• Your who's-off calendar inside TimeLeaf still shows who's away, and approved leave can post to a shared Outlook calendar; anyone who lives outside the Microsoft stack can subscribe to their own private calendar feed link instead. Setup details are in the docs.

Outlook sync is 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, and confirmation to the employee. Turn on the opt-in daily digest of who's off and it works the same way in either one too. 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 (shown as Out of office), and single sign-on with a Microsoft account — all Professional and up. Slack, by contrast, has its own strength: interactive approve/decline DMs. The opt-in daily digest of who's off isn't a Slack-only perk, either — it's off by default and, once an admin turns it on, posts to a Slack channel or, via a Channel Webhook, a Teams channel. Both platforms match users to employees by email, and the notifications themselves, and the digest once enabled, are on every plan, including Starter. 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 (Microsoft 365 / Entra ID and Google Workspace) 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.

Directory sync and SSO details are on the security page.

What you need to connect Teams

Teams notifications are on every plan, including the Starter plan ($50/mo), alongside leave management, the team calendar, email notifications, CSV export, blackout periods, and GDPR tools. Entra ID sync, Outlook calendar sync, and Microsoft SSO are part of the wider Microsoft 365 integration and start at Professional ($90/mo).

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

Install TimeLeaf from the Microsoft Teams store.

Most teams are live in under 30 minutes. Every plan comes with a 14-day free trial (no credit card required), 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.