
Is Time in Lieu Hour for Hour or Time and a Half?
Each award’s “time off instead of payment for overtime” clause answers this differently. We read the clause in each of the awards below:
| Award | Clause | Time off for 2 h at 150% | Take it within | In writing? |
|---|---|---|---|---|
| Retail Award | cl 21.3 | 3 hours (overtime rate) | 6 months | Yes |
| Hospitality Award | cl 28.5 | 2 hours (hour for hour) | 6 months | Yes, each pay period |
| Fast Food Award | cl 20.7 | 3 hours (overtime rate) | 6 months | Not stated |
| Pharmacy Award | cl 21.5 | 3 hours (overtime rate) | 6 months | Not stated |
| Clerks Award | cl 23 (shiftworkers: cl 29) | 2 hours (hour for hour) | 6 months | Yes, each pay period |
| Manufacturing Award | cl 32.8 | 2 hours (hour for hour) | 6 months | Yes, each pay period |
| Security Award | cl 19.4 | 2 hours (hour for hour) | 6 months | Yes, each pay period |
| SCHADS Award | cl 28.2 | 2 hours (hour for hour) | 3 months | Yes, each pay period |
Award text at awards.fairwork.gov.au, read 23 September 2026. The Fair Work Ombudsman’s overtime pay page has the clause for other awards.
The difference is real money. On an hour-for-hour clause, 2 hours of overtime at time and a half buys 2 hours off, worth a third less than the overtime pay. On an overtime-rate clause it buys 3 hours, the same value as the overtime pay.
The Rules Every TOIL Clause Shares
- It must be agreed. Your employer can’t impose it and “must not exert undue influence or undue pressure” on your decision. You can also ask for it as a flexible working arrangement request (section 65 of the Fair Work Act).
- It covers overtime already worked. The hour-for-hour clauses need a separate agreement for each pay period’s overtime, stating the hours and when you worked them.
- It has a deadline. Time off must be taken at an agreed time within 6 months of the overtime (3 months under the SCHADS award).
- Untaken TOIL is paid at overtime rates: in the next pay period after the deadline, in the next pay period after you ask, or in your final pay if you leave.
- Your employer keeps a copy of the agreement as an employee record.
What the Written Agreement Must Say
The Clerks Award (cl 23.3) is typical. The agreement must state:
- the number of overtime hours it covers and when they were worked;
- that you and your employer agree you may take time off instead of being paid for them;
- that if you ask at any time, you must be paid for any of those hours not yet taken, at the overtime rate that applied when you worked them; and
- that the payment will be made in the next pay period after you ask.
Awards include a sample agreement (Schedule E of the Clerks Award; Schedule D of the Security Award, which links to the Fair Work Commission’s template TOIL agreement). You don’t have to use it, and an exchange of emails counts.
What “the Overtime Rate” Means
Payouts use the overtime rate for when the hours were worked. Under the Clerks Award, for full-time and part-time staff, that is:
| When | Overtime rate |
|---|---|
| Monday to Saturday — first 2 hours | 150% |
| Monday to Saturday — after 2 hours | 200% |
| Sunday — all day | 200% |
| Public holiday — all day | 250% |
Clerks Award cl 21.4(a), Table 5. Other awards: see our overtime and penalty rates guide or work out a shift in the overtime pay calculator.
Enterprise Agreements and Award-Free Jobs
If an enterprise agreement covers you, its own TOIL clause applies instead of the award’s, and it can set a different ratio or deadline. Search the agreement for “time off instead of” or “TOIL”.
If you’re award and agreement free, the Fair Work Act doesn’t give you a higher rate for overtime (Fair Work Ombudsman), so TOIL depends entirely on your contract. The hours you’re asked to work still have to be reasonable.
Time in Lieu on Your Payslip
Hours taken as TOIL are paid at your ordinary rate, so a TOIL day looks like a normal day on your payslip, often shown as its own line with a running balance. When untaken TOIL is paid out, it should be paid at the overtime rate that applied when you worked it, not your ordinary rate. Check the balance against your own record of hours. The work hours calculator can total a timesheet.
Related Calculators and Guides
- Overtime Pay Calculator: overtime and penalty pay for a shift
- Overtime and Penalty Rates Guide: rates by award
- Leave Loading Calculator: 17.5% loading on annual leave
- Final Pay Calculator: what you’re owed when you leave
- Award Rates: find your award
Frequently Asked Questions
Time in lieu questions and answers
What is time in lieu?
Time in lieu (TOIL, or time off in lieu) is paid time off you take instead of being paid for overtime. It isn't in the National Employment Standards. You only get it if your award, enterprise agreement or contract allows it and you and your employer agree to it.
Is time in lieu hour for hour or time and a half?
It depends on the award. The Clerks, Hospitality, Manufacturing, Security and SCHADS awards give one hour off for each overtime hour. The Retail, Fast Food and Pharmacy awards give time off equal to the overtime payment, so 2 hours at time and a half buys 3 hours off.
Can my employer make me take time in lieu instead of overtime pay?
No. Under every award clause we checked, TOIL needs an agreement between you and your employer, and the employer must not use undue influence or pressure. Without an agreement, overtime is paid at the overtime rate.
Does time in lieu need to be in writing?
The Clerks, Hospitality, Manufacturing, Security, SCHADS and Retail awards say the agreement must be in writing. The Clerks, Hospitality, Manufacturing, Security and SCHADS clauses also need a separate agreement for each pay period's overtime. An exchange of emails is enough. The Fast Food and Pharmacy clauses just say the parties may agree.
What happens to time in lieu I don't use?
If you don't take it within 6 months (3 months under the SCHADS award), your employer must pay it in the next pay period at the overtime rate for when you worked it. You can also ask to be paid out at any time, and it must be paid in the next pay period.
Is time in lieu paid out when I leave?
Yes. Under each award clause, TOIL you haven't taken when your job ends must be paid at the overtime rate that applied when you worked the overtime. It is part of your final pay.
Do award-free employees get time in lieu?
Only if their employment contract gives it. The Fair Work Ombudsman says award and agreement free employees are not entitled to a higher rate of pay for overtime under the Fair Work Act, so any overtime pay or TOIL for them comes from the contract.
How we worked this out▼
Overtime pay is hours × multiplier × your ordinary hourly rate. Time off is the overtime hours (hour-for-hour clauses) or hours × multiplier (overtime-rate clauses), as each award’s clause states. We value time off at your ordinary rate, because that is what you are paid for a TOIL hour.
Each award’s basis, deadline and writing requirement was read from the consolidated award text on 23 September 2026. General information, not advice: your enterprise agreement or contract may differ.
Sources & References
- 1Overtime pay – time off instead of overtime pay— Fair Work Ombudsman
- 2Maximum weekly hours fact sheet— Fair Work Ombudsman
- 3General Retail Industry Award 2020 (MA000004), cl 21.3— Fair Work Commission
- 4Hospitality Industry (General) Award 2020 (MA000009), cl 28.5— Fair Work Commission
- 5Fast Food Industry Award 2020 (MA000003), cl 20.7— Fair Work Commission
- 6Pharmacy Industry Award 2020 (MA000012), cl 21.5— Fair Work Commission
- 7Clerks—Private Sector Award 2020 (MA000002), cl 23 (shiftworkers: cl 29)— Fair Work Commission
- 8Manufacturing and Associated Industries and Occupations Award 2020 (MA000010), cl 32.8— Fair Work Commission
- 9Security Services Industry Award 2020 (MA000016), cl 19.4— Fair Work Commission
- 10
- 11Agreement for time off instead of payment for overtime (template)— Fair Work Commission
Last verified: 23 September 2026. Our content is based on the latest information from official Australian government sources.
Anita Bell
AuthorFounder & Senior Bookkeeper
Accountancy degree (2015); certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One
Anita Bell earned her accountancy degree in 2015 and has worked as a senior bookkeeper with Prime Bookkeeping for over 5 years. This built her skills in Australian and New Zealand tax legislation and industry regulations. She is certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One, and works with payroll and rostering software including Gusto, Deputy, Tsheets and KeyPay. She has strong experience in hospitality, building and construction, financial services, real estate, ecommerce, and medical and health services.
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