Comp off policy template
Copy the text below and replace everything in square brackets with your company details.
1. Purpose
This policy explains how employees of [Company Name] earn and use compensatory off. It recognises approved work on a weekly off, a holiday, or beyond normal hours, by granting paid time off in return, within clear limits.
2. Scope
This policy covers employees who are asked to work on a rostered weekly off or a declared holiday, or to put in approved extra hours where comp-off is offered instead of overtime pay. It works with the overtime policy, the weekly off policy and the holiday policy.
3. How comp-off is earned
- Comp-off is earned only for work that the reporting manager approved in advance.
- Working a full day on a weekly off or holiday earns [1] day of comp-off.
- Working half a day earns half a day of comp-off.
- Approved extra hours may be credited as comp-off in place of overtime pay where the overtime policy allows it.
4. Crediting and validity
HR credits comp-off to the employee's balance once the work is approved. Comp-off must be used within [Number] days of being earned, after which it lapses. Comp-off cannot be carried indefinitely, and it is generally not paid out in cash, except where the company decides otherwise for balances that could not be used for a genuine reason.
5. Applying for comp-off
An employee applies to use comp-off like any other leave, stating the earned credit against which it is taken. The reporting manager approves it based on the balance and team cover, and then HR records it. Comp-off is not taken before it is earned and approved.
6. Responsibilities
- Employees: use comp-off before it lapses and apply for it in advance.
- Managers: approve the original work, then approve comp-off leave with an eye on cover.
- HR: credit comp-off on approval, track balances and expiry, and lapse unused credits on time.
7. Exceptions
[HR Head Designation] may extend the validity of a comp-off credit that an employee could not use because of continuous business need, for a stated period. Any extension is recorded with the reason.
8. Review
HR reviews this policy every [12] months and when the overtime or holiday policy changes. Employees are told before any change to the credit rate or the validity period takes effect.
Acknowledgement: I have read the [Company Name] comp off policy and understand how comp-off is earned, credited and used before it lapses.
Name: [Employee Name] Employee ID: [Employee ID]
Signature: [Signature] Date: [Date]
What to include
Earn only on approved work
Grant comp-off only for work the manager approved in advance. Without this, anyone who stays back on a Sunday can claim a day off, and comp-off balances grow far beyond what the business actually asked people to do.
Set a clear expiry
Give comp-off a validity, for example use within thirty or ninety days. An expiry keeps balances small, encourages people to actually rest, and stops a pile of old credits turning into a payout demand at exit.
Fix the credit rate
State that a full day worked earns one day off and half a day earns half. A clear rate avoids arguments and keeps comp-off consistent with the overtime policy, which uses the same half-day and full-day logic.
Approve the time off too
Comp-off still needs approval to use, based on team cover. Treat it as leave, not as a day the employee can simply take. This keeps shifts and desks staffed while still honouring the credit earned.
Decide on cash-out
Say whether unused comp-off is ever paid in cash, and keep it to genuine cases where the credit could not be used. A blanket cash-out turns comp-off into extra pay and defeats the purpose of time off.
Common mistakes to avoid
- Granting comp-off for any extra time worked, even when nobody approved it, so balances balloon.
- Setting no expiry, so old comp-off credits pile up and resurface as a payout at exit.
- Letting employees take comp-off before the extra work is done and approved.
- Crediting a full day off for an hour of extra work, out of step with the overtime rate.
- Keeping comp-off only in a manager's diary, so balances are lost or disputed later.
Run it in ZeniaHR
In ZeniaHR, comp-off is earned from worked weekly offs and holidays and from approved overtime taken as comp-off, credited at [4] hours for half a day and [8] hours for a full day. HR grants the credit and it appears in the leave ledger with an expiry, lapsing when it is not used in time. The employee applies to use comp-off through leave apply, with a live preview of days charged and balance after, and the reporting manager then HR approve. Overtime set to comp-off in the overtime policy flows into the same balance.
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Book a free demoSee pricingFrequently asked questions
What is comp off in a company?
Comp off, or compensatory off, is paid leave an employee earns for working on a weekly off or a holiday, or for approved extra hours, instead of being paid overtime. A full day worked usually earns a day off. The employee applies to use the credit like any leave, and it must be used before it lapses under the policy.
What is the difference between comp off and overtime?
Overtime pays the employee in money for approved extra hours, at the legal rate of at least twice the ordinary wage. Comp off gives paid time off instead of that money. Many companies offer one or the other, or a choice, for work on weekly offs and holidays. Comp off suits a lean cash month, while overtime suits employees who prefer the pay.
Does comp off expire?
Usually yes. Most policies set a validity, such as thirty or ninety days from when the comp-off is earned, after which the credit lapses. An expiry keeps balances small and encourages people to actually take the rest. If genuine business need blocked its use, some companies extend the validity or, rarely, pay the credit in cash.