Clock time off in lieu annual leave
What is time off in lieu?
Posted by Stuart Falconer • August 26, 2021

Time off in lieu, otherwise known as TOIL, is when an employer offers time off to employees who have exceeded their contracted hours. Perhaps they’ve attended a weekend conference or slept under their desk to get a big new project launched. What are the benefits of time off in lieu and how do you make it work for your business?

The basics

Essentially, time off in lieu is an alternative to pay. It means that any overtime hours worked by an employee can be taken as leave, in addition to their contracted annual leave.

As an employer, the advantage of time off in lieu compared to paid overtime is straightforward – lower costs. This is particularly true if employees would normally be paid double time. From a wellbeing perspective, time off after working unsocial or extra-long hours has a positive impact on your staff. What’s better for your business – a tired, stressed and overworked employee or one that is rested and productive? Time off in lieu can be an important part of work-life balance in your business.

The benefits

Communicated clearly and effectively, a time off in lieu policy has fantastic benefits for your business and employees:

  • Positive physical and mental wellbeing. (Read about another simple approach to this here.)
  • A tailor-made time off in lieu scheme can increase and improve employee engagement.
  • It builds a culture of trust if administered effectively.
  • Keeps your staff costs under control.
Your flexible toolkit

With the changing nature of the workplace and the impact of COVID, it’s important to consider how you incorporate flexible working into your business. Time off in lieu is another element in your toolkit. It offers employees the flexibility and positive workplace culture they increasingly expect. As we’ve seen in the news recently, not even hardworking investment bankers are prepared to work long hours without better benefits anymore. Perhaps not the best example – I’m sure your hearts aren’t bleeding!

Make it work for your business

Time off in lieu has clear benefits, but as with anything HR it needs to be managed carefully. Don’t let it run out of control without effective measures in place:

  • Keep accurate records of overtime worked and how much time off an employee has accumulated.
  • What is the limit for the amount of time off that can be accrued? Does it need to be taken by a specific date?
  • Clearly set the parameters of overtime to deter employees from misusing the system, i.e. working unnecessary overtime.
  • Make sure any overtime and time off in lieu is authorised by managers. Agreeing when the leave can be taken should be a conversation between employee and manager.
  • Are there particular times of the year when you might need to restrict the amount of time off in lieu that can be taken?

Remember my favourite mantra? Expectations, Accountability, Consequences. It underpins so much of HR and good management. Make sure employees know the rules around time off in lieu, what the boundaries are and the consequences of overstepping them. 99% of your employees will appreciate the option but be prepared for the 1% who always push their luck!

How can we help?

Morgan Thomson HR can support you in creating a positive workplace culture. We can advise you on employee engagement strategies, benefits and flexible working policies that will work for you, your staff and your business. Feel free to email me at or call for an informal chat: 0345 095 0139.