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Time in Lieu (TOIL): Rules, Rates and Calculator

Time in lieu is paid time off you take instead of overtime pay. It isn’t a National Employment Standards entitlement: you get it only if your award, enterprise agreement or contract allows it, and you agree to it. Under most awards it must be in writing, taken within 6 months, and paid out at the overtime rate if it isn’t. The ratio differs: Hospitality, Clerks, Manufacturing, Security, SCHADS give an hour off per overtime hour, while Retail, Fast Food, Pharmacy give time equal to the overtime payment (2 hours at 150% = 3 hours off).

Official ATO ratesUpdated FY2026-27Free foreverNo signup required

NES entitlement

None

Comes from your award, agreement or contract

Hour for hour

5 awards

Hospitality, Clerks, Manufacturing, Security, SCHADS

At the overtime rate

3 awards

Retail, Fast Food, Pharmacy: 2 h at 150% = 3 h off

Use it within

6 months

3 months under SCHADS, then paid at overtime rates

TOIL vs Overtime Pay Calculator

Enter the overtime you worked. See what it pays as overtime, how many hours of time off it buys under your award, and what the time off is worth.

Your base rate, before any penalty or loading.

Usually public holiday overtime.

Overtime worked
3 hours
Paid as overtime
$150.00
Time off in lieu (at the overtime rate)
5 hours
That time off pays, at your ordinary rate
$150.00
Paid out if not taken in time
$150.00

Under this clause the time off matches the overtime payment: 5 hours off. An hour-for-hour clause would give only 3 hours. Retail Award cl 21.3: take it within 6 months or it must be paid at the overtime rate.

Multipliers are your award’s overtime rates for full-time and part-time staff. Untaken time off is paid “at the overtime rate applicable to the overtime when worked”, which is why the payout equals the overtime pay. Casual overtime rates differ by award.

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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:

AwardClauseTime off for 2 h at 150%Take it withinIn writing?
Retail Awardcl 21.33 hours (overtime rate)6 monthsYes
Hospitality Awardcl 28.52 hours (hour for hour)6 monthsYes, each pay period
Fast Food Awardcl 20.73 hours (overtime rate)6 monthsNot stated
Pharmacy Awardcl 21.53 hours (overtime rate)6 monthsNot stated
Clerks Awardcl 23 (shiftworkers: cl 29)2 hours (hour for hour)6 monthsYes, each pay period
Manufacturing Awardcl 32.82 hours (hour for hour)6 monthsYes, each pay period
Security Awardcl 19.42 hours (hour for hour)6 monthsYes, each pay period
SCHADS Awardcl 28.22 hours (hour for hour)3 monthsYes, 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:

  1. the number of overtime hours it covers and when they were worked;
  2. that you and your employer agree you may take time off instead of being paid for them;
  3. 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
  4. 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:

WhenOvertime rate
Monday to Saturday — first 2 hours150%
Monday to Saturday — after 2 hours200%
Sunday — all day200%
Public holiday — all day250%

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

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.

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.

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.

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.

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.

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.

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.

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

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    Maximum weekly hours fact sheet— Fair Work Ombudsman
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Last verified: 23 September 2026. Our content is based on the latest information from official Australian government sources.

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