What time off in lieu is
Time off in lieu (TOIL) is paid time off you take instead of being paid for overtime. Rather than receiving an overtime payment, you and your employer agree that you bank the time and take it off later at your ordinary rate. It is a common alternative to overtime pay in many Australian workplaces.
TOIL is not a standalone National Employment Standard. It exists because your modern award or enterprise agreement allows it, so the precise rules depend on the instrument that covers you.
Your award sets the rules
Most awards that permit TOIL set out the same kind of conditions:
- the agreement to take TOIL must usually be in writing
- time is generally accrued at the equivalent overtime hours worked (for example, one hour of overtime equals one hour of TOIL, unless the award states a higher rate)
- if TOIL is not taken within a set period, the employer usually has to pay out the overtime at the overtime rate
- you cannot be forced to take TOIL instead of overtime pay against your wishes.
Rostered days off (RDOs)
A rostered day off (RDO) is a different arrangement. You work slightly longer ordinary hours across a cycle so that the extra minutes build up into a full paid day off. A classic example is the 19-day month in construction and manufacturing: you work a little over 8 hours a day and take every 20th day as a paid RDO. RDOs are paid time, set by your award or agreement, and are not overtime.
Banked hours
Banked hours are extra hours you accumulate and save to take as paid time off later, where an award, agreement or workplace policy allows it. The principle is the same as TOIL: hours worked now are converted into time off later, by agreement and within whatever limits the instrument sets.
Common ground rules
- These arrangements are by agreement, not unilateral employer directions.
- They are governed by your award or enterprise agreement, not the NES.
- Accrued time off generally has to be paid out if you leave before taking it.
- They do not reduce any NES entitlement such as annual or personal leave.
Key takeaways
- TOIL is paid time off taken instead of overtime pay, by written agreement.
- RDOs come from working longer ordinary hours to earn a paid day off.
- The rules sit in your award or enterprise agreement, not the NES.
- Untaken TOIL or banked hours are usually paid out on termination.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.