Time Off in Lieu (TOIL) Policy: A Free Template for UK Employers

In the UK workplace, extra hours are sometimes unavoidable — a deadline looms, a client project overruns, or urgent cover is needed. Instead of paying overtime, many employers choose to offer Time Off in Lieu (TOIL). But without a clear written policy, TOIL can create confusion for managers and employees alike.

In this guide, we’ll cover what TOIL means, why it matters, and provide a free downloadable TOIL policy template to help your business stay fair and compliant.

What is Time Off in Lieu (TOIL)?

TOIL allows employees who work beyond their contracted hours to take paid time off later. For example, if an employee works an extra three hours on a busy Friday, they may book three hours off during the following week.

Unlike paid overtime, TOIL gives employers more flexibility while ensuring staff are compensated for additional work.

Why a TOIL Policy Matters

A written TOIL policy ensures consistency and avoids misunderstandings. It helps you:

• Stay compliant with UK working time regulations.

• Promote fairness by making sure extra hours are recognised.

• Support work-life balance by giving employees proper rest time.

• Control payroll costs by offering time off instead of higher overtime rates.

Without a policy, managers may apply TOIL rules differently, leading to disputes or legal risk.

What Should a TOIL Policy Include?

When drafting a TOIL policy for your business, it should cover:

• Eligibility – which employees can accrue TOIL.

• Authorisation – how overtime and TOIL must be approved.

• Accrual – whether hours are granted on a 1:1 basis or another ratio.

• Usage rules – how quickly TOIL should be taken (e.g. within three months).

• Carry-over – whether unused TOIL can roll into the next leave year.

• Termination – what happens to TOIL balances when an employee leaves.

• Record-keeping – how hours are logged and tracked.

Free Download: TOIL Policy Template (UK)

To save you time, we’ve prepared a free, ready-to-use TOIL policy template. It’s designed for UK employers and can be customised to fit your business.

This template sets out clear rules on entitlement, accrual, usage, and compliance with UK employment law.

TOIL vs Overtime: What’s the Difference?

A common question is whether TOIL is the same as overtime. The short answer: no.

• Overtime pay means employees receive extra wages (often at an enhanced rate).

• TOIL means employees receive paid time off later instead of money.

Both approaches are valid, but a clear TOIL policy helps set expectations upfront.

Frequently Asked Questions About TOIL in the UK

Do employers have to offer TOIL in the UK?
No. There is no legal requirement for UK employers to offer TOIL. It’s a discretionary benefit that must be clearly outlined in contracts or company policy.

Can TOIL be carried over to the next holiday year?
That depends on company policy. Some businesses require TOIL to be used within a set period (e.g. three months). Others allow carry-over with manager approval.

Does TOIL count towards annual leave entitlement?
No. TOIL is separate from statutory holiday entitlement. It’s additional time off earned by working extra hours.

What happens to TOIL if an employee leaves the company?
Unused TOIL should be settled fairly, either by being taken before the leaving date or paid out, depending on the employer’s policy and employment contract.

Is TOIL the same as flexible working?
No. TOIL is specifically time off in return for extra hours worked. Flexible working relates to patterns of work (e.g. start and finish times, remote working).

Final Thoughts

Introducing a Time Off in Lieu (TOIL) system can be a win-win for employers and employees. It recognises additional effort while giving businesses more flexibility in managing costs.

By putting a clear TOIL policy in place, you’ll promote fairness, protect your business from disputes, and show employees that their time is valued.

Don’t start from scratch — use our free TOIL policy template to get set up today.