Free time off in lieu (TOIL) policy template

What the policy covers

Ten short sections, each with numbered clauses you can keep, change or delete:

1. Purpose
2. Who this policy covers
3. Earning TOIL
4. Recording TOIL
5. Taking TOIL
6. Expiry and carry-over
7. Leaving [Company name]
8. Overtime pay, minimum wage and working time
9. Records
10. Review

Anything in [square brackets] is yours to fill in. In the Word file those parts are highlighted, so you can see what is left to do.

How to adapt the template

1. Download the Word file and save a copy under your company’s name.
2. Make the decisions in the table below. Where a clause says “Choose one”, keep one option and delete the other.
3. Replace every bracketed item: your company name, the manager role that approves TOIL, the system or form people use, and the numbers.
4. Delete what you do not need. A short policy that people follow beats a long one they do not.
5. Delete the template notes at the top, and add a version number and review date.
6. Talk it through with your team before it starts, and tell new starters where to find it.
7. Set up your records to match. Use the same rate, expiry and limits in your TOIL tracker, so the numbers follow the rules.

The decisions to make

Paying out TOIL when someone leaves: the trade-off

No law decides this for you. It is the employer’s choice, and clause 7.2 has both options. Whichever you pick, clause 7.1 asks the leaver and their manager to plan for the TOIL to be taken during the notice period, which avoids the question for most people.

• Paying it out is the fairer-looking option. Staff are more willing to work extra hours when they know the time will not be lost, and there is nothing to argue about on the way out. The cost is money at the end, and a TOIL balance becomes a debt the business carries.
• Not paying it out costs less and pushes people to take their TOIL while they are still working for you. But it can feel like unpaid work to the person leaving, and it does not switch off the minimum wage: for lower-paid staff, the final pay must still cover all the hours they worked at no less than the minimum wage.

If someone leaves having taken more TOIL than they earned, you can only take the difference out of their final pay if their contract or a written agreement allows it. Clause 7.3 says so.

The law the policy is built on

TOIL is a contractual arrangement, not a statutory right. You and the employee agree the terms, such as when it can be taken. Section 8 of the policy sets out the rules that still apply around it. We checked each one against gov.uk in October 2026:

• Overtime pay. Employers do not have to pay for overtime, but a worker’s average pay for all the hours they work must not fall below the National Minimum Wage (overtime: your rights, time off and paid leave).
• Minimum wage. It is checked for each pay reference period, which can be up to one calendar month: the pay for the period divided by the hours worked in it. Salaried staff are checked against the basic hours in their contract for the year (calculating the minimum wage, working hours for which it must be paid).
• The 48-hour week. Workers cannot work more than 48 hours a week on average, normally averaged over 17 weeks, unless they are 18 or over and choose to opt out in writing. Unpaid overtime you ask someone to do counts towards the average. An opt-out can be cancelled with at least 7 days’ notice, or up to 3 months if the agreement says so. Under 18s cannot work more than 8 hours a day or 40 hours a week (maximum weekly working hours, calculating your working hours, opting out of the 48-hour week).
• Rest breaks. Adult workers are entitled to a 20-minute break when they work more than 6 hours a day, 11 hours’ rest between working days, and 24 hours off each week or 48 hours each fortnight. Under 18s get a 30-minute break when they work more than 4.5 hours, 12 hours’ daily rest and 48 hours’ weekly rest. Some jobs have exceptions (rest breaks at work, young workers).
• Holiday. TOIL sits on top of the 5.6 weeks’ paid holiday most workers are entitled to (holiday entitlement).
• Deductions from pay. An employer can only deduct from pay when the law requires it, the contract allows it, or the worker agrees in writing (deductions from your pay).
• Records. Records that show you paid the minimum wage must be kept for at least 6 years (employers and the minimum wage).
• Changing a contract. Usually both employer and employee need to agree (how a contract can be changed).

This is a template and general guidance, not legal advice. If your situation is unusual, such as staff paid close to the minimum wage on annualised hours, or a collective agreement, take advice.

Putting the policy into practice

A policy only works if the numbers behind it are right. Four free tools help:

• The TOIL tracker spreadsheet logs hours earned and taken, with the rate, who approved it and an expiry date, and keeps a balance for each person.
• The online TOIL tracker does the same job in your browser, with no spreadsheet to keep.
• The TOIL calculator turns extra hours into time off at the rates in clause 3.3, including weekend and bank holiday rates.
• The guide to TOIL explains what time off in lieu is and how it differs from overtime and holiday.

Rotaleave has TOIL built in, and its settings line up with the policy. Staff request TOIL for hours they have worked, on the web or in the iPhone and Android apps, and managers approve it (clause 4.2). You choose whether TOIL is taken in hours, half days or full days (clause 5.2), set a negative TOIL limit or keep balances at zero or above (clause 5.6), and set a default expiry in days (clause 6.1). Staff see their balance with an “expiring soon” warning, and a TOIL report shows hours credited, spent, available and expiring across the team. Rotaleave does not apply your rate for you: hours are entered after the rate is applied. See TOIL tracking software for the overview and how TOIL works in Rotaleave for the detail. It is free for teams of 10 or fewer; see pricing for larger teams.