As a rule, if you retire before the end of a leave year, you’ll be given a lump-sum payment for all your accrued and unused annual leave. The calculation will be based on your hourly rate of basic pay, the amount you would have earned if you had stayed at work until your leave ran out.
This can be a real benefit when you retire just before a pay increase goes into effect, which typically happens with the first full pay period of a new year. (Even if there isn’t a pay raise, which has sometimes happened, you’d still get a boost if you got a step increase before you retired.)
How much annual leave you can earn depends on your years of creditable federal service. If you have three years or less service, you earn 4 hours per pay period (13 days a year). With three years but fewer than 15, you earn 6 hours per pay period (20 days a year). And with 15 years or more, you earn 8 hours per pay period (26 days a year). Senior Executive Service members, senior level and senior scientific and technical employees earn 8 hours of annual leave per pay period (26 days a year) regardless of their years of service.
The amount of annual leave you can carry over from one leave year to the next depends on your employment category. If you are like most employees, you can carry over a maximum of 240 hours (30 days). Any leave above amount is called “use of lose.” If you don’t use it before the end of the leave year, you’ll lose it.
If you are employed overseas, you can carry over 560 hours (45 days). If you are a Postal Service bargaining unit employee, you can carry over 440 hours (55 days). Postal Service Executive and Administrative Schedule employees can carry over a total of 560 hours (70 days). A special higher ceiling also applies to some long-time members of the SES.
Note: If you are a Postal Service bargaining unit employees, you can be paid for any leave you carried over from the previous year and any additional leave you earned during the year you retire, not to exceed the carryover limit for your bargaining unit.
Read more on annual leave policy in the federal government as ask.FEDweek.com