Taking time off in lieu for working overtime or extra hours is a common practice in some workplaces. It’s often referred to as TOIL, time off in lieu, or a day in lieu.
This guide explains what TOIL means, how it works, and what employees and employers need to know to ensure fair and legal arrangements.
What is Time Off in Lieu?
Time off in lieu (TOIL) is when an employee receives paid time off instead of overtime pay for working additional hours. It’s a way of recognising extra work with leave, rather than wages.
TOIL is often used in busy periods or when covering for absent colleagues. But it’s essential that any agreement is clearly set out and agreed in advance. Informal or verbal arrangements can lead to confusion and disputes.
What is the Law on Time Off in Lieu (TOIL) in the UK?
TOIL is not specifically covered by UK employment law. It is a voluntary arrangement that must be agreed between the employer and the employee.
Many organisations use TOIL as a flexible way to reward extra hours, but informal agreements can lead to problems if leave is not properly tracked or honoured. For this reason, it’s best practice to include a clear TOIL policy in your employment documentation.
There is no automatic right to be paid for overtime or offered time off in lieu. Unless it’s stated in your contract or staff handbook, your employer is not required to provide either.
If TOIL is offered, ask for the arrangement to be confirmed in writing so expectations are clear from the outset.
The EU Working Time Directive & Minimum Wage Rules
Although TOIL itself is not a statutory entitlement, any extra hours worked must still comply with UK working time laws. Under the EU Working Time Directive, employees cannot be made to work more than 48 hours per week on average unless they have formally opted out.
In addition, TOIL must not cause your average hourly pay to fall below the National Minimum Wage. Employers must ensure that all hours worked, including those repaid with TOIL, meet this legal requirement.
Failure to comply can result in legal penalties or fines, so it’s important to manage TOIL arrangements carefully.
Creating TOIL Policies & Procedures
A written TOIL policy helps both employers and employees avoid misunderstandings. Without one, problems may arise, such as:-
- Employees taking longer to complete tasks within contracted hours.
- Staff building up excessive untaken TOIL, leading to operational disruption.
A good TOIL policy should include:-
- Limits on how many TOIL days can be accrued
- Deadlines for when TOIL must be used (e.g. within 3 months)
- Rules on how TOIL is recorded and approved
For example, a policy might state that:-
“No more than three TOIL days can be carried over into the next calendar year” or “A maximum of one TOIL day per month may be accrued.”
The policy should be transparent and agreed by both parties.
Time in Lieu Policy Best Practise
For employees: Understand what your contract or staff handbook says about extra hours. If asked to work overtime, make sure there’s a clear agreement about how and when that time will be repaid.
For employers: Be clear about how overtime is compensated. Put a policy in place to cover:-
- Whether TOIL or overtime pay is offered
- How much extra time must be worked before TOIL is accrued
- Limits on how much TOIL can be stored
- When accrued TOIL must be taken
Also ensure you have a reliable system to record extra hours and TOIL usage. A lack of oversight can lead to staff frustration and undermine trust.
Would you like to explore other types of flexible work arrangements or learn how TOIL differs from paid overtime?
Further Reading:-
TOIL – Frequently Asked Questions
Still got questions about being rewarded for extra time worked with days in lieu? Here’s some quick answers to the most commonly asked questions about this type of arrangement.
Yes, TOIL is legal as long as it is voluntarily agreed and does not breach working time or minimum wage laws. There’s no legal requirement to offer TOIL or pay for overtime unless it’s stated in your contract.
Yes. TOIL is treated as normal paid holiday. You’re paid your usual salary during the time off, so it’s included in your taxable earnings, but it doesn’t increase your tax bill.
TOIL stands for Time off in Lieu. This is a term commonly used to refer to extra holidays provided to workers in exchange for working additional hours or days.
I have to attend alarm activation call outs for the company, however my manager has not put any calculable TOIL in place. As these are mostly unsocialable hours, 2 in the last 24 hours, 1st at 4am and the 2nd at just before midnight and I did not leave the site until after midnight, should I not get extra time, ie. time and 1/2 or double?
How does time off in lieu count towards minimum wage calculations?
My son is salaried but not for much more than the minimum wage. He works a lot of unpaid overtime in the summer so that he is paid less than minimum wage for each hour actually worked in those periods.
He gets ‘time owing’ during the off season to compensate for the overtime.
So by ‘salaried’ I assume he gets same pay each month but works different hours each month. His employer should ( must) have an annual hours calculation showing how many working hours he’s contracted for in a 12 month period and what the pay is. Eg £10 per hour x 37 hrs x 52 weeks = £19240. It may be on his contract. If over the 12 months he’s worked more than these hours this will reduce his pay, possibly to below NMW. He should ask his employer for the calculation, plus he needs to keep his own record of hours worked and if any discrepancies, or info required, phone ACAS or make an online complaint to HMRC who deals with NMW. The NMW rules around TOIL when paid as a ‘time worker’ ( paid an hourly rate for the actual hours worked) are that TOIL must be taken or paid no later than the pay period following the ‘extra’ working hours. So, extra time worked in January, must be taken or paid for in February otherwise there’s been an underpayment which may take pay below NMW.
HI Emma. Really useful information about TOIL. If you work additional hours to your contracted hours at a weekend /BH where you would normally be paid time plus30% but choose to take TOIL, does this follow that you would be entitled to an additional 30% TOIL?