Normal PTO is earned in increments of hours per pay period. Each person has an accrued PTO balance that they draw down from when they go on vacation. From the accounting perspective, the company is not paying them for work during this time, they are paying the employee out of their earned PTO balance.

This creates some complications for the company where the accumulated PTO can be a liability on the books. It's a number that represents something they have to pay out with no labor in return. Depending on laws and circumstances they may also have to pay out the PTO balance when someone departs the company.

Some companies skip all of this by switching to untracked PTO, which is often sold as unlimited PTO. Employees don't accumulate a PTO balance and when they go on vacation they get paid normally, not out of a separate bucket. No extra liabilities on the book.

The trick is that PTO is now up to your manager's approval and judgment. At good companies you can actually take advantage of this for a more relaxed and flexible PTO schedule if you get your work done. I have done it and it's great when the company is good.

At bad companies, it becomes a trick where your manager always says "I don't know, now isn't really a good time to take that much time off" and then everyone gets less vacation time than they had before. I have also experienced this and it's very depressing.