We're hiring

Compensatory Off

Published: September 15, 2025 Last modified: September 16, 2025 9 min read

Get a summary in:

Table of Contents

What is Compensatory Off?

Compensatory off, or COMP off, is a paid leave given to employees for working on weekends, holidays, or beyond regular hours. Compensatory off is also known as compensatory leave in some firms.

There are 2 main purposes of giving compensatory leave to employees:

Compensatory offs help maintain work-life balance. For example, giving COMP off to an employee for attending parents' meetings, or working on a weekend.
COMP time also reduces burnout. For example, an employee using comp off time for recreational activities.

Now, let's explore the different types of compensatory offs.

Types of Compensatory Off

There are six types of compensatory leaves in India:

Comp Off for Overtime: In this type of compensatory leave, employees are given comp time or cash for working overtime based on a company's leave policy.
Paid Holidays: Some firms also provide paid holidays to compensate employees for working on holidays.
Comp Off for the Weekend: Employees can also earn compensatory time off for working on weekends. Also, employees are entitled to overtime payment under the Factories Act and the Shops and Establishments Act in India.
On-Call Compensatory Off: In certain situations, employers also offer on-call compensatory time off if employees need to work for more than one shift.
Compensatory Leave for Travel Incentive: Firms provide compensatory time off for travel as well. For example, a salesperson can ask for comp time off for travelling to meet clients.
Compensatory Time Off for Emergencies: At times, workers need to work overtime due to emergencies. In such cases, they can ask for compensatory time off.

How does Compensatory Off Work?

Comp off policies vary from firm to firm, and comp offs are usually covered under the employee contract. However, here are some general steps for receiving a comp off.

Accrual

In India, the Factories Act and the Shops and Establishments Act provide for compensatory time off for working on weekends or public holidays. For example, an employee can usually earn a half-day comp off for working for four hours.

Expiration

Employees need to use their compensatory leave within 60-90 days in India. For example, in Karnataka, employees can use their comp time off within 90 days. Similarly, expiration time varies as per state regulations.

Limitation

A major limitation of comp off in India is that it cannot be carried forward like earned leave, as compensatory leave is only a substitute leave.

Note that compensatory time off is decided based on the company policy, and different companies have different leave policies.

What are the Eligibility and Validity Rules for Compensatory Off?

In India, there are two rules that decide the eligibility criteria for compensatory offs.

The Factories Act 1948, and
The shops and establishments act in different states.

Under these rules, there are mainly five eligibility criteria for getting a comp off -

Qualification: Permanent employees working in a factory or a commercial establishment can take compensatory time off. Remember that freelancers are not eligible for comp off.
Work Hours: Employees who work on holidays or weekends can avail themselves of a compensatory day off. Employees who work beyond their regular hours can apply for compensatory leave as well.
Tenure: In India, the law doesn't define a minimum employee tenure for taking comp off. However, it is a common practice for firms to allow such time off after probation.
Overtime: Legally, an employee should not be asked to work for more than 48 hours in India. The Factories Act and the S&E acts of most states establish this working limit.
Validity Period: The validity period varies as per state regulations. However, most firms have a 30-day validity period for availing comp off.

Note that the central government employees should check the Central Services Rules 1972, and state government employees should refer to their state services rules to know more about comp offs.

Benefits of Compensatory Off

There are five major benefits of offering compensatory time off -

Cost Savings: Employers can offer paid time off and save costs related to overtime payments.
Employee Satisfaction: Employees would be more satisfied if they could spend the paid time with their family or in other recreational activities.
Improved Productivity: Having a flexible comp off policy helps manage burnout, and stress-free employees are generally more productive. In turn, productive employees would contribute to the tangible assets of an organization.
Flexible: Compensatory offs help create a flexible work schedule. Subsequently, employers can ask employees to work when needed, and employees can take time off to maintain a work-life balance.
Retention: Providing flexible comp off arrangements makes employees feel valued. So, employees are more likely to stay with an organization.

Streamline HR Management with factoHR

Did you know that 49% of candidates choose an organization based on its leave and benefit administration policy?

Automate HR, recruit talent, and retain employees with factoHR, and grow with 3,500 + organizations in 20 + countries! See factoHR in action today!

FAQs

What does Compensatory Time Mean?

Compensatory time means that paid time is given to employees for working on holidays, weekends, or additional shifts. Compensatory time is also known as compensatory leave or compensatory time off.

Do We Get Paid for Compensatory Time Off?

Whether or not you would get paid for compensatory off depends on your company's policy. Some firms offer paid time off to compensate for extra work. In contrast, other firms offer cash as a reward for overtime.

How to Request a Compensatory Off?

Employees can request comp offs in two ways:

They can mail their requests for comp offs ot their firm's manager/HR professional, or
They can request a comp off by raising tickets if their organization uses HR software.

How do You Calculate Comp Off?

There are two ways to calculate comp off -

Employees can approach HR representatives and ask to calculate their comp off as per their leave balance, and
Some organizations use software that automatically updates leave balance by calculating comp-offs and other leaves.

Is Compensation Equal to Salary?

Not necessarily. Compensation could be in the form of paid time off or salary. While salary refers to the total Cost To Company (CTC).

For Which Employees in an Organization is Compensatory Time Off Available?

Only permanent employees are eligible for comp offs in India, as the Factories Act and the S&E acts of different states provide for compensatory leaves to permanent employees in India. Remember that freelancers are not entitled to compensatory leave under the Indian legislation.

How is Compensatory Time Off Different from Compensatory Off?

There are two ways to make up for the extra hours an employee works: paid time off and overtime compensation. Overtime pay is only a monetary award given to employees depending on the additional hours they work. In contrast, comp offs are time off work or leaves accrued in their account for working overtime.

What Restrictions Apply to Compensatory Offsets?

There are restrictions on compensatory time off, or comp off. It can affect the schedule and needs to be administered carefully. Moreover, accrual and expiration can be intricate. Seasonal changes, complicated payroll procedures, and possible employee abuse might also be problems.