Time Off in Lieu (TOIL) is a common arrangement where employees who work additional hours receive equivalent time off instead of overtime pay. While TOIL is widely used, it must be managed carefully to comply with the Working Time Regulations 1998 and to ensure employees actually take the time off they have earned. This template provides a clear TOIL policy for UK businesses that protects both employees and the organisation.

Key Takeaways

  • TOIL is a discretionary arrangement — there is no statutory right to TOIL in the UK.
  • TOIL must be managed in accordance with the Working Time Regulations 1998 (maximum 48-hour week, 11-hour daily rest, etc.).
  • Clear tracking, approval, and usage rules prevent TOIL from becoming a liability.
  • TOIL should not be used to avoid paying overtime where contractual overtime entitlements exist.

What This Template Covers

This template provides a complete TOIL policy for UK businesses. It covers TOIL entitlements, accrual rules, usage requirements, approval processes, interaction with the Working Time Regulations, tracking and record-keeping, and the treatment of TOIL on termination. It is designed for businesses of all sizes.

TOIL Policy Template

1. Purpose

[Company Name] recognises that employees may occasionally need to work additional hours to meet business demands. This policy outlines the arrangements for time off in lieu (TOIL), ensuring that additional hours worked are fairly compensated with equivalent time off.

2. Scope

This policy applies to all employees of [Company Name] who are required to work additional hours beyond their normal working hours. It does not apply to:

  • Employees who are contractually entitled to overtime pay (unless they elect TOIL instead)
  • Senior managers or directors who are excluded from the Working Time Regulations 1998 under the opt-out provisions

3. What is TOIL?

TOIL (Time Off in Lieu) is an arrangement where an employee who works additional hours receives equivalent time off at a later date, rather than overtime pay. For example, if an employee works 2 additional hours on a Saturday, they may take 2 hours of TOIL at a mutually agreed time.

4. Eligibility for TOIL

  • TOIL is available to employees who work additional hours at the request of their manager or with the prior approval of their manager.
  • Unauthorised additional hours are not eligible for TOIL.
  • TOIL is subject to manager approval and business needs.

5. Accrual Rules

  • TOIL accrues at a rate of [1:1] (1 hour of TOIL for each 1 hour of additional work).
  • [Alternative: TOIL accrues at a rate of [1.5:1] (1.5 hours of TOIL for each 1 hour of additional work) as a benefit for working unsociable hours.]
  • TOIL must be recorded on the day it is earned, via [HR system / time tracking tool / manager approval email].

6. Usage Requirements

  • TOIL must be taken within [3/6] months of being earned. TOIL that is not taken within this period will be [lost / paid at the normal hourly rate].
  • TOIL should be taken at a time agreed with the employee’s manager, giving at least [1 week] notice where possible.
  • TOIL may be taken in full-day or half-day increments. Taking TOIL in single-hour increments is permitted with manager approval.
  • TOIL should not be taken on days where the employee’s absence would cause significant operational disruption.

7. Working Time Regulations Compliance

TOIL arrangements must comply with the Working Time Regulations 1998:

  • Maximum weekly hours: Employees must not exceed an average of 48 hours per week over the reference period (17 weeks for most employees, or 26 weeks for certain industries). Where an employee has opted out of the 48-hour week, TOIL arrangements must still be reasonable.
  • Daily rest: Employees are entitled to a minimum of 11 consecutive hours of rest in each 24-hour period. TOIL arrangements must not compromise this entitlement.
  • Weekly rest: Employees are entitled to an uninterrupted rest period of at least 24 hours in each 7-day period (or 48 hours in each 14-day period).
  • Night workers: Night workers must not work more than an average of 8 hours per 24-hour period over a reference period.

7. Interaction with Annual Leave

  • TOIL is separate from annual leave. Employees should not be required to use annual leave to cover additional hours worked.
  • Where TOIL falls on a day that would otherwise be a working day, it is not counted as annual leave.
  • Employees may choose to combine TOIL with annual leave for extended time off, with manager approval.

8. TOIL on Termination

  • Where an employee leaves [Company Name] with accrued but unused TOIL, the TOIL will be [paid at the employee’s normal hourly rate / lost].
  • Where the employee has taken more TOIL than they have accrued, the excess may be [deducted from final pay / ignored].
  • The treatment of TOIL on termination must be clearly stated in the employment contract.

9. Record-Keeping

[HR Contact/Department] will maintain records of TOIL accrued and taken by each employee. Records will include:

  • Date the TOIL was earned
  • Hours worked and TOIL accrued
  • Date TOIL was taken
  • Running balance of TOIL owed

10. Policy Review

This policy will be reviewed annually or following changes to the Working Time Regulations 1998.

Requirement Detail
Statutory right None — TOIL is a discretionary arrangement
Working Time Regulations Maximum 48-hour week; 11-hour daily rest; 24-hour weekly rest
Accrual rate At employer’s discretion (1:1 or enhanced)
Usage timeframe At employer’s discretion (typically 3–6 months)
TOIL on termination Must be clearly stated in the employment contract
Opt-out Employees may opt out of 48-hour week; TOIL must still be reasonable

Customisation Tips

  • Define a clear accrual rate. 1:1 is standard, but 1.5:1 or 2:1 for unsociable hours (evenings, weekends, bank holidays) is a valued benefit.
  • Set a usage deadline. Without a deadline, TOIL balances can grow to unsustainable levels. 3–6 months is a reasonable timeframe.
  • Integrate with your HR system. Manual TOIL tracking is error-prone. Use your HR platform to automate accrual and usage tracking.
  • Address the opt-out. If your employees have opted out of the 48-hour week, clarify that TOIL arrangements still apply and additional hours must be reasonable.
  • Include a cap. Consider setting a maximum TOIL balance (e.g., 40 hours) to prevent excessive accrual.

Common Mistakes to Avoid

  1. Not tracking TOIL. Without accurate tracking, TOIL disputes are almost inevitable. Use your HR system to record accrual and usage.
  2. Allowing TOIL to accumulate indefinitely. Uncapped TOIL creates a financial liability and reduces the employee’s rest time. Set a clear usage deadline.
  3. Using TOIL to avoid overtime pay. If an employee has a contractual entitlement to overtime pay, TOIL cannot be imposed as an alternative without the employee’s agreement.
  4. Ignoring Working Time Regulations. TOIL arrangements must comply with the WTR. Excessive TOIL without adequate rest can breach daily and weekly rest requirements.
  5. Not addressing TOIL on termination. Ambiguity around TOIL payout on termination can lead to disputes and potential employment tribunal claims.

Frequently Asked Questions

Can we require employees to take TOIL instead of paying overtime?

This depends on the employee’s contract. If the contract entitles the employee to overtime pay, TOIL cannot be imposed as an alternative without the employee’s agreement. If the contract allows for TOIL at the employer’s discretion, TOIL may be offered in lieu of overtime pay. Always check the employment contract and any applicable collective agreement.

Does TOIL accrue interest or increase over time?

No. TOIL does not accrue interest or increase in value. One hour worked equals one hour of TOIL (or the enhanced rate specified in the policy). TOIL should be taken within the timeframe specified in the policy (typically 3–6 months).

What happens if an employee leaves with unused TOIL?

The treatment of unused TOIL on termination depends on the employment contract and company policy. Common approaches include:

  • Paying out unused TOIL at the employee’s normal hourly rate
  • Forfeiting unused TOIL (only lawful if clearly stated in the contract)
  • Requiring the employee to take TOIL during their notice period

Ensure the policy clearly states the treatment of TOIL on termination to avoid disputes.

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