What is TOIL (Time Off in Lieu) and How Does it Work?

What is TOIL?

Time Off in Lieu, commonly known as TOIL, is an arrangement where employees who work extra hours beyond their normal schedule receive equivalent time off rather than overtime pay. The term "in lieu" means "instead of" -- so it is time off instead of additional payment.

TOIL is not a statutory right in the UK. It is a contractual arrangement between employer and employee, and its terms should be clearly set out in the employment contract, employee handbook, or a standalone TOIL policy.

How TOIL Works in Practice

The Basic Principle

1. An employee works additional hours beyond their contracted schedule
2. These hours are recorded and approved by their manager
3. The employee takes the equivalent time off at a later date

Example

Sarah normally works 9am-5pm. She stays until 7pm on Tuesday to finish a project deadline. She has accrued 2 hours of TOIL, which she could take as a late start on Friday (arriving at 11am instead of 9am).

Setting Up a TOIL Policy

A well-drafted TOIL policy should cover:

Eligibility

• Which employees can accrue TOIL (salaried, hourly, part-time?)
• Minimum grade or role level if applicable
• Whether TOIL is available to all or only specific teams

Accrual Rules

• Pre-approval required: Extra hours should be authorised in advance by a manager, not accrued retrospectively
• Rate of accrual: Usually hour-for-hour, though some employers offer enhanced rates for weekends or bank holidays
• Maximum accrual cap: Set a limit (e.g. 16 hours or 2 days) to prevent large balances building up

Usage Rules

• Time limit for using TOIL: Typically within 1-3 months of accrual
• Booking process: Same as annual leave (request and approval)
• Minimum increments: Can TOIL be taken in 30-minute blocks, or only half/full days?
• Business needs override: TOIL requests can be declined if operational needs require the employee to be at work

Expiry and Carry-Over

• Set a clear use-it-or-lose-it deadline
• Decide whether unused TOIL is paid out at the end of the period or forfeited

Legal Considerations in the UK

Working Time Regulations 1998

• Employees must not work more than an average of 48 hours per week (unless they have opted out in writing)
• Employees are entitled to a minimum of 11 consecutive hours of rest between working days
• TOIL arrangements must not result in breaches of these regulations

National Minimum Wage

• When calculating whether an employee is being paid the National Minimum Wage, all hours worked (including overtime that is compensated with TOIL rather than pay) are included
• If TOIL arrangements reduce the effective hourly rate below the NMW, the employer is in breach of the law

Holiday Pay

• Under recent UK case law, regular overtime (including hours that accrue TOIL) may need to be factored into holiday pay calculations
• Seek legal advice if TOIL is regularly accrued, as this could affect holiday pay obligations

TOIL vs Overtime Pay

Best Practices

• Always require pre-approval for extra hours before they are worked
• Keep accurate records of hours accrued and taken
• Set reasonable limits on how much TOIL can be banked
• Review balances monthly and encourage timely use
• Ensure TOIL does not become a substitute for adequate staffing

How Grove HR Manages TOIL

Grove HR includes a dedicated TOIL tracker that lets employees log extra hours with manager approval, tracks balances in real time, sends reminders before expiry deadlines, and integrates TOIL usage into leave calendars alongside annual leave and sick leave.