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A day or two should honestly be fine. Have them talk about the solution after turning it in. It's a lot easier and more interesting to talk about code you just wrote than it is to make someone whiteboard something on the spot.

It doesn't need to be a time trial. If you're impressed with the code and hire the candidate, worst case is you get someone who takes a little more time but writes great code.

The time requirement doesn't just set a limit for the candidate though, it also serves as a limit to consider for the interviewer when speccing out the project.

Having a time limit of a day or two is fine if the actual project should reasonably take a couple of hours, but if the project actually takes more than a whole work day to complete, then that's a different story (in my humble opinion, anything that would take more than a couple of hours is an unreasonable demand on the candidates time unless you offer some kind of compensation).

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