Though accrued annual leave doesn’t count toward retirement eligibility with strategic planning you can turn it into a sizable lump-sum payment when you retire. That’s why it’s important to know how much you can carry over to the next year and your “use it or lose it” limit. If you’re like many federal retirees, you’ll use your lump sum payment to help cover expenses while waiting for your full annuity payments to start.
2025 Annual Leave Dates
According to the OPM, a leave year begins on the first day of the first full biweekly pay period in a calendar year. It ends on the day immediately before the first day of the first full biweekly pay period in the following calendar year. “Use it or lose it” annual leave is the amount accrued but unused that exceeds your maximum carry-over into the next leave year.
“As long as you retire before the new leave year begins, you won’t lose the annual leave that’s above the limit.”
For GS employees the maximum carry-over limit is 240 hours (30 days). As long as you retire before the new leave year begins, you won’t lose the annual leave that’s above the limit. If you don’t use any paid leave during the last year of your career, the hours will be added to your carry-over hours to maximize the lump sum you receive.
- Use It or Lose It Date: November 29, 2025
- Leave Beginning Date: January 12, 2025
- Leave Ending Date: January 10, 2026
How Your Annual Leave Lump Sum Is Calculated
To determine the amount of your lump sum payment, your agency will multiply the number of hours of accumulated and accrued annual leave by your hourly rate of pay, plus other types of pay you would have received while on annual leave. Since your unused annual leave is projected forward, any pay increases that go into effect before your leave runs out will be paid at the higher rate.
Types of Pay Included in a Lump-Sum Payment
- Rate of basic pay
- Locality pay or other similar geographic adjustment
- Within-grade increase (if the waiting period is met on the date of separation)
- Across-the-board annual adjustments
- Administratively uncontrollable overtime pay, availability pay, and standby duty pay
- Night differential for FWS employees only (including a portion of the lump-sum period that would have occurred when the employee was scheduled to work night shifts)
- Regularly scheduled overtime pay under the Fair Labor Standards Act for employees on uncommon tours of duty
- Supervisory differentials
- Non-foreign area cost-of-living allowances and post differentials
- Foreign area post allowances
For more information, review the OPM Annual Leave Fact Sheet.
