Organizations can now automate Time Off In Lieu (TOIL) or compensatory leaves by integrating time tracking with leave accruals.
This feature allows you to automatically compensate eligible overtime or rest-day work with compensatory leave instead of traditional payroll payments, ensuring a scalable and compliant way to reward extra effort.
This article explains how to set up Time Off in Lieu (TOIL) for Deel Payroll employees.
In this article:
Configuring Rate Policies for TOIL
Creating and Assigning Time Off Policies
The Employee Workflow & Automatic Accrual
How to Configure Rate Policies
To begin automating TOIL, you must first define which hours worked qualify for compensatory leave rather than payroll compensation.
Step 1 - Navigate to Time Tracking Settings and select the Rate Policies tab
Click Overtime and Differentials to create a new policy.
Step 2 - Define General Settings
Enter a policy name (e.g., "UK TOIL Policy") and select the Direct Employee Payroll worker type. Choose the applicable Country.
Define your workweek start day and overnight shift details.
Step 3 - Set Overtime Thresholds
Define your daily/weekly limits.
If you select the Weekly limit, then you must create at least one weekly overtime rule by defining the weekly overtime threshold and setting the compensation method.
You can choose to pay standard overtime via payroll or route it to compensatory leave. Please note that selecting compensatory leave (Time Off in Lieu) requires the creation of a time-off policy to work effectively.
Under Compensation Type, select Compensatory Leave and set a Conversion Rate (multiplier). For example, a 200% rate means 1 hour worked equals 2 hours of leave accrued.
You can similarly set rules for working hours on public holidays and rest days.
Step 4 - Review Overlap and Working Day Rules
You can review the overlap conditions and also add working day conditions in this step by defining the rates for late or overtime work.
Review and Save: The system will display a summary of your rules. Ensure there are no overlaps before clicking Save.
How to Create and Assign a Time Off Compensatory Policy
Once the rate policy is set, you need a designated "bucket" where those hours can live.
Step 1 - Go to Time Off Settings and click Add a Policy.
Click on Organization settings and select the Time off Card.
Step 2 - Create a Custom Time Off Policy
Select Custom Policy and choose Compensatory Leave as the policy type.
Name the policy (e.g., "TOIL") and define the details. Refer to How to Create a Custom Time Off Policy for Workers for detailed flow.
Step 3 - Assign Compensatory Time off Policy to Workers
Select the same group of workers you identified in the Rate Policy (e.g., all Direct Employees in the UK).
Click Publish.
Employee Workflow & Automatic Accrual
Time Off In Lieu (TOIL) enables end-to-end automation of compensatory leave accrual. Once policies are active, no manual calculations are required.
Submission: Employees submit their shifts via their Workspace in the Time Tracking section.
Approval: Managers receive a notification in their For You Today card to review and approve the submitted hours.
Accrual: As soon as the manager approves a shift that meets the TOIL criteria, the system calculates the hours based on the set multiplier and updates the employee's Time Off Balance automatically.
Example: If an employee works an 8-hour shift on a Sunday (Rest Day) with a 200% multiplier, the system will automatically add 16 hours to their Compensatory Leave balance.
Frequently Asked Questions
[ACCORDION] Which worker types are eligible for TOIL automation?
Currently, this feature is available for Direct Employees and Deel Payroll workers located outside of the United States.
[ACCORDION] Can I mix payroll and TOIL in the same policy?
Yes. You can configure the system to pay standard overtime (e.g., first 5 hours) via payroll while directing specific weekend or holiday work toward compensatory leave.
[ACCORDION] What happens if I haven't created a Time Off policy yet?
The system will trigger an alert during the Rate Policy setup. You must have a "Compensatory Leave" type time off policy active for the hours to have a place to accrue.
To create a Time off policy refer to How to Create a Custom Time Off Policy for Workers