Time Off in Lieu and Comp Time: How They Work and How Rules Differ by Country

Time off in lieu, often shortened to TOIL and called comp time in the US, means taking paid hours off later instead of being paid for overtime now. Whether that trade is allowed, how many hours each extra hour earns, and when the hours expire depend on your country, your sector and your contract. In some jobs it is not allowed at all.

In the US, the Fair Labor Standards Act lets state and local government employers give comp time instead of overtime pay, at no less than an hour and a half off for each overtime hour, but it gives private employers no such option for staff who are owed overtime. Before you bank a single hour, pin down three terms: the rate, the deadline and what happens to unused hours if you leave. TOIL is one practical corner of the wider work-life balance question.

What does time off in lieu mean?

Time off in lieu is paid time off that replaces overtime pay for hours worked beyond your normal schedule. The UK government’s guidance describes it as time off instead of payment for overtime, with the terms, such as when it can be taken, agreed between you and your employer.¹

Three parts make up every TOIL arrangement: the rate (how many hours off each extra hour earns), the deadline (how long you have to use them) and the exit rule (what happens to unused hours when you leave). Leave any one of them vague and you have the makings of a dispute.

An analyst who stays three hours late twice in one month to close a project. Under one employer she gets six hours off. Under another she gets nine. Under a third, she has six hours that vanish at the end of the quarter because nobody approved the dates. Before agreeing to any TOIL offer, ask which of the three terms is written down.

Is TOIL calculated at time and a half?

Sometimes. Some rules give you one hour off for each overtime hour; others give an hour and a half, matching the time-and-a-half premium that overtime pay often carries. Which applies depends on the law, award or contract covering your job.

Where overtime is normally paid at a premium, an hour-for-hour swap is worth less than the cash. US federal law says that where state and local government employers use comp time, it must be earned at no less than one and a half hours per overtime hour, the same multiple the law sets for overtime pay.²

Hour-for-hour rules exist too. Australia’s Clerks—Private Sector Award 2020 gives an employee who agrees to TOIL the same number of hours off as overtime hours worked, and its own example says 2 overtime hours earn 2 hours off.³ US federal government employees also earn comp time hour for hour, according to the Office of Personnel Management.⁴

1. Hour for hour: each overtime hour buys one hour off; used, for example, in Australia’s Clerks award and for US federal employees
2. Time and a half: each overtime hour buys an hour and a half off; required where comp time replaces overtime pay for US state and local government staff, in Ontario and in federally regulated Canadian workplaces

The International Labour Organization’s first convention, in 1919, set pay for the overtime it permitted at no less than one and a quarter times the regular rate, in the industries it covered.⁵

To compare offers, multiply your overtime hours by the rate in your agreement. Ten extra hours at hour for hour come back as ten hours off; at time and a half, as fifteen. Then set that against what the same hours would earn as overtime pay. If the time off is worth less, that may be lawful where you work, but you should know it before you agree.

Expiry, caps and payout when you leave

TOIL usually comes with a use-by date, and the main protection for employees is a rule that unused hours turn back into money. Ontario’s employment standards guide, for example, requires banked time to be taken within three months, or within 12 months if the employee agrees electronically or in writing, and paid as overtime if the job ends first.⁶

A deadline without a payout rule turns banked time into free work. Hours banked in a busy March under a policy with a three-month window must be used by about the end of June, and with no payout rule, they are then gone.

Do you get paid for unused TOIL when you leave a job?

Usually yes, where a law or award sets a payout rule, as Ontario’s does. Federally regulated workplaces in Canada must pay the overtime within 30 days of the job ending.⁷ Australia’s Clerks award requires payment at the overtime rate on termination, and also when the hours are not taken within six months.³

US state and local government employees who leave are paid for unused comp time at the higher of their average regular rate over their last three years or their final regular rate.² Those employers can also cap the bank: up to 480 hours for public safety, emergency response and seasonal work, and 240 hours for other staff, with any overtime above the cap paid in cash.⁸ A 2000 Supreme Court decision, Christensen v. Harris County, held that the FLSA does not stop a public employer from requiring staff to use their comp time, so a bank can be drawn down on the employer’s schedule.⁹

Where no law sets the rule, as in the UK, the answer sits in your contract or the employer’s written policy.

Time off in lieu by country: what the law allows

Rules on time off in lieu sit inside each country’s overtime law, so the same arrangement can be standard practice in one country and unlawful in another. The summaries below show the range for five places; sector rules, awards and collective agreements can change the detail. A nurse at a US county hospital can lawfully be offered comp time; at a private hospital, the same nurse, if owed overtime, must be paid in cash.

Is comp time legal in the US?

For state and local government employers, yes; for private-sector employees who are owed overtime, no. The FLSA’s comp time provision applies only to states, their political subdivisions and interstate government agencies, and needs an agreement before the work is done.² The Labor Department’s fact sheet for new businesses lists granting comp time instead of overtime pay among the common problems its investigations find.¹⁰ Some jobs are exempt from the federal overtime rules, and the Labor Department notes that where a state has its own wage law, the employer must follow whichever rule is stricter, so check both.⁸

Can my employer give me time off instead of overtime pay in the UK?

Yes, if your contract or an agreement says so. UK law gives no automatic right to overtime pay, and Acas, Britain’s workplace advice service, notes that some employers offer time off instead.¹¹ Two floors still apply: your average pay for all hours worked must not fall below the National Minimum Wage,¹ and you usually cannot be required to work more than an average of 48 hours a week unless you opt out in writing.¹²

Australia

Under the Clerks award, one of Australia’s industry awards, TOIL needs a separate written agreement for each pay period’s overtime, and the agreement must state the hours covered and that you can ask at any time to be paid for untaken hours at the overtime rate; an exchange of emails counts, and the employer must not pressure you into it.³ Other awards and enterprise agreements can differ.

Canada

Which rules apply depends on who regulates your employer: federal labour standards under the Canada Labour Code cover federally regulated industries, and other workplaces follow the employment standards of their province or territory.¹³ Ontario requires banked time at one and a half hours per overtime hour, agreed electronically or in writing.⁶ Federally regulated workplaces use the same rate and need a written agreement that includes the dates you will take the time off.⁷

The European Union

EU law sets a ceiling on hours, not a price for overtime. The Working Time Directive, adopted in 2003, caps average weekly hours, counting overtime, at 48, averaged over a reference period of up to 4, 6 or 12 months depending on national law or collective agreements, with an individual opt-out allowed in some member states.¹⁴ Pay and TOIL rules come from national law and collective agreements.

Everywhere else

If your country is not listed, look up your labour ministry’s guidance on overtime, your collective agreement or award, and your contract, in that order. A union or labour inspectorate can tell you whether TOIL can lawfully replace overtime pay in your job.

When TOIL turns into unpaid overtime

TOIL becomes unpaid overtime when the hours are banked but never taken or paid. A Trades Union Congress analysis of official UK survey data suggests that giving away extra hours is common. It counts all unpaid extra hours, of which lost TOIL is only part, but it shows the scale of the problem.

The study

Moderate evidence

How many UK employees give hours away: a union reading of official survey data

The TUC, the UK’s federation of trade unions, used the Office for National Statistics’ Labour Force Survey for the second quarter of 2025. It estimated that 3.5 million employees, 11.9% of employees, regularly worked unpaid overtime, averaging 6.8 unpaid hours a week. The figures rest on what workers report in the survey; the analysis is a union campaign release, not peer-reviewed, and it gives no count of hours that had been promised back as time off.¹⁵

For the people who do it, that average is close to an extra working day a week in many jobs. A union has an interest in a large number, so treat the estimate as a rough sign of scale.

Hours go into an informal note, the busy season never ends, requests to take the time are put off, and the deadline passes. US regulations for public employers name the danger directly: comp time cannot be used as a way to avoid overtime pay, and employees must not be pushed to accept more of it than the employer can realistically let them take.¹⁶

Myth

Banked hours are safe until you get round to using them.

Fact

Ontario, Australia's Clerks award and the rules for US federal staff all set deadlines for using banked hours; what protects you is a written rule that untaken hours are paid.

If the extra hours are becoming a habit rather than a peak, the problem is the workload. The evidence on long working hours and your health is a reason to take the time off rather than bank it indefinitely.

How to track hours and ask for TOIL in writing

Record every extra hour yourself, and get the TOIL terms in writing before you rely on them. Several of the rules above, including Australia’s Clerks award and Canada’s federal standards, make a written agreement a legal condition. A record is your evidence if the bank is ever disputed.

A useful log has the date, start and finish times, what the work was and who asked for it. Note the request in the same line (“asked by the project lead on Tuesday”) so the hours are tied to an instruction rather than to your own choice to stay late.

When you raise it, ask your manager or HR three things: what rate the hours earn, by when they must be taken, and what happens to any balance if you leave. If the answers are not in your contract or a policy, confirm them in a short email. If the conversation feels awkward, the approach for setting limits with your manager applies here too: put the request in terms of the work.

Before you bank overtime as time off

• I know whether TOIL can lawfully replace overtime pay in my job and country
• I log the date, hours, task and who asked for each extra stint
• The rate, deadline and payout rule are written down
• I have booked dates to take the time, not just a balance
• I check my balance against payslips or the HR system each month

When to get advice

Get advice when money is at stake or the employer disputes your hours. Soon, within weeks, if banked hours have expired unpaid, if you were told TOIL is your only option in a job where the law requires overtime pay, or if you are leaving with a balance. Routinely, ask HR or your union to explain the policy when you start a job that involves overtime.

Wherever you work, a union, labour inspectorate, legal aid service or employment lawyer can advise on your own case. National examples of free routes include the US Labor Department’s Wage and Hour Division, Acas in Great Britain, the Labour Relations Agency in Northern Ireland, the Fair Work Ombudsman in Australia, and in Canada your provincial or territorial employment standards office or, for federally regulated jobs, the federal Labour Program.

The bottom line

Time off in lieu is a fair trade only when three terms are clear: the rate, the deadline and the payout if the hours go unused. Check first whether your country lets TOIL replace overtime pay at all; in the US private sector it usually does not. Then log every extra hour and get the terms in writing, so you have a record if the bank is ever disputed.