If you retire before the end of the leave year, you will receive a lump-sum payment for all of your accrued leave after retirement. However, if you retire after the end of the leave year, your lump-sum leave payment will be limited to that maximum amount of leave allowable, which for most employees is 240 hours.
For example, leave year 2006 ends on January 6, 2007. if you retire on January 3, you will be paid for your entire balance of annual leave and it will not be limited to your maximum carry over (typically 240 hours). However, if you retire on January 7 or after, you will be paid a lump-sum annual leave payment for your accrued annual leave limited to the maximum carry over (typically 240 hours).
Some tax consideration should be taken if, upon retirement, you will be receiving a large lump-sum payment for annual leave. Taxes are applied to lump-sum payments in the year in which you receive the money. Example: An employee retiring September 30 could incur a larger tax burden by collecting almost a full year