Unlike sick leave, where you earn four hours every pay period, the amount of annual leave you earn depends on your years of service. With less than three years of service, you will earn four hours of annual leave per pay period. With three years but less than 15, you’ll earn six hours. And with 15 or more years of service, you’ll earn eight hours.

In a change from past practice, the Federal Workforce Flexibility Act of 2004 has given agencies the ability to give credit for prior non-federal or active duty military service to newly appointed or reappointed employee if the skills and abilities gained in that outside employment are directly related to the job he or she will be performing and are needed to carry out an important agency mission or reach a key performance goal.

By law, most non-Postal Service employees are allowed to carry a maximum annual leave balance of 240 hours from one leave year to the next, although overseas employees may carry a maximum of 45 days. Senior level employees and members of the Senior Executive Service have a limit of 720 days, although SES members who had a higher leave balance when that cap was put into effect for them in 1994 were allowed to retain their excess leave, which became a personal leave ceiling.

The annual leave limits are different for employees of the U.S. Postal Service. For bargaining unit employees it’s 440 hours; for Executive and Administrative Schedule employees it’s 560 hours.

As a rule, you may only take annual with a supervisor’s approval. While most employees use it for vacations, a good many hours are also used to cover the odd day off to conduct personal business or extend a weekend. In some cases, it’s used when sick leave runs out and an employee wants to maintain a steady income stream. And, under certain conditions, your supervisor may be able to advance you annual leave, which cannot exceed the amount of leave you would earn by the end of the leave year.

You can also donate some to employees who are experiencing a medical or family emergency and have run out of leave. And you and your fellow employees can even donate some to a leave bank, if your agency has one. Then if you have a medical or family emergency, you can apply for a loan from it.

When you retire, any unused annual leave will be paid to you in a lump sum. The leave hours will be projected forward as if you were still on the payroll and earning the rate of pay you would have received were you still on the job. This is one reason why many employees retire at the end of the year. Any hours that carry over to the next leave year when the annual pay increase goes into effect, will have them paid at the new higher rate. The other reason is that use-or-lose leave that would otherwise be lost when the new leave year begins will be included in the lump-sum payment.