Quick answer
Time off in lieu, often called TOIL, is paid time away from work taken instead of receiving overtime pay for overtime already worked.
In Australia, TOIL is not a universal extra-leave entitlement. Some awards and registered agreements allow employees and employers to agree to time off instead of overtime pay, but the rules depend on the award, enterprise agreement or other workplace arrangement that applies.
The amount of time credited, whether a written agreement is required, when TOIL must be taken and what happens if it remains unused can vary between workplaces.
What this means
TOIL is an alternative to receiving overtime pay. It is different from annual leave, personal leave and public-holiday entitlements. Fair Work states that some awards and registered agreements allow an employee to take paid time off instead of being paid overtime.
Before relying on TOIL, check:
- whether the applicable award or registered agreement allows it;
- whether the employee and employer must agree in writing;
- which overtime hours the agreement covers;
- how much paid time off is credited;
- when the TOIL must be taken;
- whether the employee can later request payment instead; and
- what happens to unused TOIL when employment ends.
Is TOIL always hour for hour? No. The amount can depend on the overtime rate that would otherwise have been paid. Under some awards, if an employee works 2 hours of overtime at 150%, the equivalent time off may be 3 hours. Other awards or agreements may use different rules.
Does TOIL need to be agreed in writing? Many modern awards require a written agreement for particular overtime that will be taken as time off instead of being paid. It may need to record the overtime hours, when they were worked, the agreement to TOIL, and what happens if the employee later asks to be paid.
Is TOIL the same as annual leave? No. Annual leave generally accrues progressively for eligible full-time and part-time employees. TOIL arises from overtime that has been worked and an arrangement to take paid time off instead of receiving overtime pay.
Is this the same across Australia? There is no single TOIL formula for every worker. The rules generally depend on the award, enterprise agreement or registered agreement covering the employee, not the state or territory where they work.
Common scenarios
You stay late to finish a task. Working extra time does not automatically create TOIL. Check whether the extra hours qualify as overtime and whether your award, agreement or workplace arrangement allows TOIL.
Your manager offers “time back later.” An informal arrangement may not satisfy the applicable award or agreement. Record the overtime and TOIL agreement in the required form.
You work on a public holiday. TOIL does not automatically replace public-holiday penalties or other entitlements. The applicable award or agreement may provide specific rules for public-holiday work, substitute days or overtime.
Your TOIL has not been used. Some awards require it to be taken within a specified period. If it is not taken, the employee may become entitled to payment for the overtime instead.
You want overtime paid instead. Under many award TOIL clauses, an employee can request payment for overtime previously covered by a TOIL agreement, generally at the overtime rate that applied when the overtime was worked.
You leave your job with unused TOIL. Untaken TOIL may need to be paid out according to the applicable award, agreement or other arrangement. It should not automatically be treated in the same way as unused annual leave.
How to plan this in Offdays
Track approved TOIL separately from annual leave. For each amount, record the overtime date, overtime hours worked, TOIL credited, approval or written agreement, deadline for using the time, and whether it has been taken or paid out.
When planning a longer break, identify public holidays first, then decide whether annual leave or approved TOIL will cover the remaining ordinary workdays. This avoids treating public holidays, annual leave and TOIL as the same entitlement.
For wider leave planning, see the Australia guides and the Offdays blog. Compare any Offdays balance with your employer’s payroll or HR records before submitting leave.
Final thoughts
TOIL is paid time off taken instead of overtime pay, but there is no single Australian TOIL formula. Some awards and registered agreements allow it, often with specific agreement, record-keeping, timing and payment requirements. Check the award or agreement that applies to you before converting overtime into time off or relying on an unused TOIL balance.