Absences can be added in Time & Expenses view. Click the arrow next to Add work hours button and select Add absence from the menu that opens.
Give the absence a descriptive name and select absence type, like Holiday. Depending on the entry you can either choose it to be All day (i.e. Holiday) or enter a Start and End time to it (i.e. if you get sick during the day). If you need to modify or delete the entry afterwards just hover you mouse over it and select what you want to do (Edit/Remove). When using All day option, it is possible to enter start and end dates which makes it easier to enter absences which last for several days.
Absences are shown in week strip and mini calendar and you can recognize them of the orange color. Even if the absence is a only part day you will easily find them from the side panel.
You can also view your absences in Schedule > Calendar and Reports > Report creation, Activities. The default activity report list your own activities for current month but from this view you can easily create your own reports and save them for later use.
Absences are entries that affect for both work hour balance calculation and resourcing. If work hour balance calculation is used, activity can be considered as paid (i.e. Holiday) or non paid (i.e. Flex time). Absence types can be managed from Settings > Activity types.