We develop a pseudospectral multi-domain formulation for the accurate modeling of generic diffractive optical elements, here exemplified by off-plane waveguide holograms for the coupling between guided waves and freely propagating wavefronts. The individual elements entering the multi-domain formulation for the solution of the time-domain Maxwell equations is described, stressing the ability to accurately and efficiently handling very general geometric complexity and combinations of several materials. The efficacy of the overall scheme is illustrated by computing the time-domain solution of a plane waveguide problem and an off-plane waveguide coupler.