TOIL: what time off in lieu means and when it is allowed

By the HRPricing editorial teamReviewed October 18, 2026How we research and score

TOIL stands for time off in lieu: paid time off an employer gives instead of paying for extra hours worked. UK employers can offer it, but US private employers cannot swap overtime pay for time off: the Fair Labor Standards Act lets only public agencies give compensatory time instead of overtime, at 1.5 hours for each overtime hour (29 USC 207(o)).

TOIL (time off in lieu): paid time off given to an employee in place of payment for extra hours they have worked.

How TOIL works in practice

You work beyond your normal hours, the extra time is logged, and you take the same amount of paid time off later. "In lieu" means "instead of." A TOIL policy should say who approves the extra hours, the rate (hour for hour or more), the most you can bank, when it expires and whether it is paid out when you leave. "Lieu time" and "lieu days" mean the same thing, and a lieu day is often given for working a public holiday.

TOIL is earned from extra hours. PTO is leave you get whatever hours you work.

US rules: overtime is paid in cash in the private sector

Under 29 USC 207(a)(1), non-exempt employees must get at least one and one-half times their regular rate for hours over 40 in a workweek. Subsection 207(o) allows compensatory time instead only for employees of a state, a political subdivision or an interstate government agency, under an agreement made before the work, at 1.5 hours per overtime hour. Comp time is capped at 240 hours (480 for public safety, emergency response and seasonal work), and unused hours must be paid when employment ends.

Example: a non-exempt employee at $24 an hour works 45 hours. A private employer owes 5 hours x $36 = $180 in overtime that pay period. A county employer could instead credit 7.5 hours of comp time.

Because overtime is counted per workweek, giving time off later in the same workweek so the total stays at 40 hours or less means no overtime is due. Exempt employees are not owed overtime, so TOIL for them is a policy choice. Track hours with time tracking software; more rules are in payroll compliance.

UK rules: TOIL is allowed, but minimum wage still applies

GOV.UK says employers do not have to pay workers for overtime, and the contract usually sets overtime terms. But a worker's average pay for all hours worked must not fall below the National Minimum Wage, GBP 12.71 an hour at 21 and over from April 2026 (see UK minimum wage rates).

Example: a worker on GBP 13.50 an hour with a 40-hour contract earns GBP 540 a week. If they work 45 hours and bank the extra 5 as TOIL, GBP 540 over 45 hours is GBP 12.00 an hour, below GBP 12.71. If that week is the pay period, some of the extra time has to be paid. UK leave rules are in UK holiday and leave entitlements.

Frequently asked questions

What does TOIL mean?
TOIL stands for time off in lieu: paid time off given instead of overtime pay for extra hours worked. "In lieu" means "instead of."
Is TOIL legal in the US?
Not as a replacement for overtime pay in the private sector. Under 29 USC 207, non-exempt private employees must be paid 1.5 times their regular rate for hours over 40 in a workweek. Only public agencies may give comp time instead, at 1.5 hours per overtime hour.
How is TOIL calculated?
The employer's policy or contract sets it. In the UK it is often hour for hour. For US public employers, comp time must accrue at no less than 1.5 hours per overtime hour, so 5 overtime hours earn 7.5 hours off.
Does TOIL have to be paid out when you leave?
For US public employees, yes: unused comp time must be paid at termination at the higher of the average regular rate over the last three years or the final regular rate (29 USC 207(o)). In the UK, the GOV.UK overtime guidance we read sets no payout rule, so the contract decides.
What does lieu time mean?
Lieu time is the same as TOIL: time off you take in place of being paid for extra hours, or for working a public holiday.
Sources (3)
  1. Cornell LII (statute text): 29 USC 207 (overtime and compensatory time) (checked Oct 18, 2026)
  2. GOV.UK: Overtime: your rights (last updated Oct 5, 2026; checked Oct 18, 2026)
  3. GOV.UK: National Minimum Wage and National Living Wage rates (checked Oct 16, 2026)

This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.