Format to use for backup disk

This setup works well in my environment:

Yes, that is what Time Machine will automatically do in Big Sur and later. It will make it encrypted if you choose to encrypt your backups.

The question was how to format a drive for Time Machine. There is no need to format a drive prior to using with Time Machine unless you want to partition it so you can use part of it for something else. TM will format it correctly on its own and you can't choose which format to use.

It doesn’t matter. Time Machine will format it as it needs which will be APFS (Case-sensitive).

BlueberryLover wrote:

.. you'll need to create the Time Machine volume (with Terminal) if you need to specify a disk quota (e.g. when the container is shared with other APFS volumes).

Unless they have fixed that in the GUI, you have to do that in Terminal. Weren't you the person who posted the instructions?

This setup works well in my environment:

- Pie Lover

.. you'll need to create the Time Machine volume (with Terminal) if you need to specify a disk quota (e.g. when the container is shared with other APFS volumes).