Hi! Allocations is were you set up or assign the number of days (per time off type) that the employee(s) will have available in a period of time. This can be done at the beggining of the year and the validity period could be that year. You can allocate in bulk by department, employee tag or individually selecting the employee's name. Usually Human Resources department does this.

Time off is where those days are requested to initiate approval process, (if you determined that approval was necessary for that time off type). You can request time off in behalf of an employee if you are the Time off officer, or the employee can directly request them in the Time off app. If you stated that approval was neccesary, notifications will be sent to the supervisor and/or time off officer. After validation, the balance of available days will be updated accordingly.

Hi Josep, I have a test database and understand the time off types but do I book legal time off also with allocations? And when to use time off as a manager? I think I use them both wrong, so when to use 'allocations' and when 'time off' as a manager? Thanks

You need understanding all the time-off management in Odoo. 

First of all, you must configure the time off types. Menu: Time Off - Configuration - Time Off types. This configuration shows all the possibilities. 

The allocations are to give employees the right to enjoy free days. It operates in several different ways, depending on the configuration of the time off type.

My advice is to test it at demo.odoo.com, or creating a test BD at odoo.com. 

I think you'll be able to understand how it works.