Time Off requests skip holidays as shown in the timesheet.
This video describes how the program handles paid holidays when entering time off requests like vacation. A good example is Christmas. Most professional organizations pay employees for this day off. It's also a time when employees like to take vacation. It's common to take the entire week of Christmas off. You can combine the paid holiday with some accrued vacation and get a full nine days off. (5 weekdays + both weekends.) Simply taking three vacation days gets you nine!
The timesheet skips paid holidays when you enter a new time off request. The Christmas example is shown in the video.
This is all part of a comprehensive PTO and vacation tracking system that's integrated nicely into a timesheet.
Sometimes this holiday skipping can be confusing to companies that don't handle holidays that way. Many companies give paid holidays but require employees to enter 8 hours for those days. This ensures that their timesheets show a full 40 hours for the week, and ensures that they are paid for the time off. If you don't enter your 8 hours for Christmas, you won't get paid for it. This is probably due to a lack of intelligence in their payroll software, but it's still common enough. In those cases, you can uncheck the "Use for time off" checkbox for holidays so time off requests don't skip those days.
Another solution to the skipping issue is to create a special non-billable "Time Off" project. Employees can enter 8 hours per day into the paid holidays. This also makes their timesheet show 40 hours for the week, and ensures they are paid for those days.
You'll notice that holidays show up in the timesheet as a peach-colored shaded day. There's nothing automated about this... no hours are automatically added for you on this day. It is simply a reminder that something is special about that day. You can still enter project hours into it, if you like.
Paid Time Off (PTO) tracking is more than time off requests. In fact, you don't even need to enter a time off request for paid holidays. The program automatically skips them if you do, but it is entirely optional. Timesheets will show less than 40 hours for weeks that you don't enter project hours, but that's normal. You don't always need to see a magic "40" at the bottom of your timesheet. Again, if you want to see that magic number, you could create a special project to account for those holidays.