Time off in lieu (banked overtime)

Time off in lieu (banked overtime) is paid time off given instead of overtime pay. Where allowed, it needs an agreement and has strict rules.

Also called: TOIL, banked overtime, lieu time, comp time, overtime bank

What time off in lieu (banked overtime) means

Time off in lieu (TOIL), also called banked overtime, means giving an employee paid time off later instead of paying overtime wages now. For example, an employee who works 3 hours of overtime this week takes paid time off next month rather than getting overtime pay on this cheque.

Many small employers like it because it saves cash during busy periods, and many employees like the extra time off. But it only replaces overtime pay if your province allows it and you follow its rules. Otherwise, the overtime is still owed as money.

In everyday speech, people also say "lieu time" for a day off given for working a public holiday. That is a separate rule, covered by public holiday pay.

How it works

Check your province's rule first. Where banking is allowed, the conditions usually cover: whether it needs a written agreement or the employee's request; the rate at which time is banked (for example 1.5 hours off for each overtime hour, or hour for hour); how long you have to give the time off; and what happens to unused time.

Keep a clear running record of hours banked, hours taken and the balance, and show it to the employee, ideally on each pay statement. A shared spreadsheet is fine for a small team.

Let employees take banked time at times that suit both of you, and do not let the bank grow without limit. If your province sets a deadline for using banked time, find out what you owe for any balance not taken by then, and diary the date.

When an employee leaves, check your province's rule on paying out unused banked time, and settle the balance in the final pay. This is easy to forget if the bank was tracked informally.

Time off in lieu (banked overtime) by province

Banking overtime is allowed in some provinces and not others, and the rate and time limits differ. We did not confirm these rules for any province in this update.

Where the work is done	The rule
British Columbia	Overtime: over 8 hours a day at 1.5 times, over 12 at 2 times; over 40 a week at 1.5 times. Check British Columbia's rules on time banks before banking.
Alberta	Overtime threshold: over 8 hours a day or 44 a week, whichever is greater, at 1.5 times regular pay. Check Alberta's rules on overtime agreements before banking.
Ontario	Overtime threshold: 44 hours a week, at 1.5 times regular pay. Check Ontario's rules on time off instead of overtime pay before banking.

Only the overtime thresholds in these rows were confirmed. The banking rules themselves (rate, written agreement, time limits) must be checked with your provincial employment standards office.

Example: Tracking a small overtime bank

Hugo runs a 9-person bike shop. In his province, he has confirmed with the employment standards office that he can bank overtime at 1.5 hours off for each overtime hour, under a written agreement, as long as the time is used within a set period.

His mechanic, Lise, signs the agreement and works 4 overtime hours during the spring rush. Hugo banks 6 hours of paid time off (4 times 1.5) and shows the balance on her pay statement. Lise takes the 6 hours as a long weekend in June, well inside the time limit.

Employment standards by province

Staffkin's free employment standards by province page shows the overtime threshold and rate for every province and territory, the starting point for any banking arrangement.

See the rules by province

Free tools and guides for this

Employment standards: overtime, holidays and vacation by province

Questions about time off in lieu (banked overtime)

Can I give time off instead of paying overtime?

Only where your province allows it and you follow its rules, which often include a written agreement, a set rate and a time limit for using the time. Otherwise overtime must be paid as wages.

Is banked overtime hour for hour?

It depends on the province and the agreement. Check your province's rule for the rate before you start banking.

What happens to banked overtime when an employee quits?

Check your province's rule on paying out unused banked time, and include what is owed in the final pay.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.