Time off in lieu (or TOIL) is pretty much what it says on the tin... it is time off in lieu of pay.

"Sometimes, instead of paying overtime pay, an employer may give an employee time off work with pay (banked overtime) at a rate of 1.5 hours for each overtime hour worked as part of an overtime agreement between the employer and employee."

So, the employer may pay the simply pay the full overtime rate for that extra hour, and the employee work their full shift the next day (at full pay) or the employee gets 1.5 hours off at a later date without being paid for the overtime (they only get paid the standard hours on the day they did overtime).

However, sometimes, a company may have a bit of a mixed policy. For example, I've worked at places where the overtime was matched with TOIL at a 1:1 ratio, and then any penalty rate was applied on top - so for one hour overtime at the weekend, you would accrue one hour of TOIL and be paid for an extra half hour (instead of just being paid a full 1.5 hours and gaining no TOIL).

In some companies, TOIL vs overtime pay is agreed case by case. So, if a manager asks you to work overtime you can negotiate either TOIL or extra pay.

TOIL policies often come with expiry and limit clauses - such as TOIL must be spent within a certain period after accrual or it will evaporate; TOIL cannot be in excess of so many hours. Sometimes, TOIL may also be lost on termination/resignation (unlike paid annual leave). Different jurisdictions will have different laws around what companies can and can't do with TOIL and overtime. And you should always read your work agreement or employment contract to see what your employer is offering and what limitations there are.

Time off in lieu (or TOIL) is pretty much what it says on the tin... it is time off in lieu of pay.

"Sometimes, instead of paying overtime pay, an employer may give an employee time off work with pay (banked overtime) at a rate of 1.5 hours for each overtime hour worked as part of an overtime agreement between the employer and employee."

So, the employer may simply pay the full overtime rate for that extra hour, and the employee work their full shift the next day (at full pay) or the employee gets 1.5 hours off at a later date without being paid for the overtime (they get paid eight hours on both days, even though they worked an extra hour one day and left 1.5 hours early the next).

However, sometimes, a company may have a bit of a mixed policy. For example, I've worked at places where the overtime was matched with TOIL at a 1:1 ratio, and then any penalty rate was applied on top - so for one hour overtime at the weekend, you would accrue one hour of TOIL and be paid for an extra half hour (instead of just being paid a full 1.5 hours and gaining no TOIL).

In some companies, TOIL vs overtime pay is agreed case by case. So, if a manager asks you to work overtime you can negotiate either TOIL or extra pay.

TOIL policies often come with expiry and limit clauses - such as TOIL must be spent within a certain period after accrual or it will evaporate; TOIL cannot be in excess of so many hours. Sometimes, TOIL may also be lost on termination/resignation (unlike paid annual leave). Different jurisdictions will have different laws around what companies can and can't do with TOIL and overtime. And you should always read your work agreement or employment contract to see what your employer is offering and what limitations there are.