Retirement & Financial Planning Report

The amount of annual leave you can be paid for when you retire depends on whether you are a postal or non-postal employee.

Postal Service Employees – If you are a member of the Postal Career Executive Service (PCES), you can receive a lump-sum payment for an unlimited amount of unused annual leave. If you are under the Executive and Administrative Scale (EAS), which includes supervisors, managers, postmasters and other non-bargaining unit employees, you can receive a lump-sum payment for a maximum of 560 plus any earned and unused annual leave during the year in which you retire.


In other words, if you entered that calendar year with 560 hours and took no leave during it, you could receive a payment for 768 hours. Employees covered by union contracts generally can receive a maximum lump-sum payment for 440 hours.

Non-Postal Service Employees – At one time, members of the Senior Executive Service (SES) were allowed to receive a lump-sum payment for an unlimited amount of unused annual leave. Now the ceiling is lower: 720 hours, unless you had more than that amount to your credit when the law changed. In that case, this became your personal base. The same 720 hour limit applies to senior level and senior scientific and technical employees.

With one exception, the rest of the non-postal workforce falls into a single category. If you are employed within the U.S. or any of its territories and possessions, you may accumulate and carry-over a maximum of 240 hours of annual leave into the next leave year. Overseas employees may accumulate and carry over a maximum of 360 hours.

All leave years begin on the first day of the first pay period in a calendar year.

In some cases it may even be possible to receive a lump-sum payment for more than that if your agency either restores or allows you to carry over more hours than usual. That can happen if you had scheduled such leave at the end of the year but illness prevented you from taking it or your agency was forced to cancel your leave to meet its needs. How long you will be able to hold on to that restored leave will depend on the time limits your agency sets for its use.

When calculating a lump-sum payment, your agency will project those unused hours of annual leave forward as if you were still on the rolls. The amount will be figured on what you would have received. Included in that amount will be such things as basic pay, locality pay, non-foreign area COLAs, and any pay raises to which you would have been entitled.