Understanding how annual leave is earned and what can be carried over each year is key to making the most of your federal benefits. Annual leave can be used for vacations, personal time, rest, or family emergencies. With thoughtful planning, federal employees can accumulate a substantial leave balance and potentially receive a sizeable lump-sum payout at retirement.
Federal employees under both FERS and CSRS follow the same leave accrual rules, though part-time workers receive prorated amounts based on hours worked. Those with fewer than three years of service accrue four hours of annual leave per biweekly pay period, equal to 13 days per year. Employees with three to fifteen years of service earn six hours per pay period, or about 20 days annually. Once an employee reaches 15 years of service, they accrue eight hours per pay period, totaling 26 days a year. These accrual rules do not impact retirement eligibility or the calculation of retirement benefits.
Most General Schedule employees may carry over a maximum of 240 hours of annual leave into the next leave year. Any hours above that limit must be scheduled by the Use It Or Lose It date (November 29, 2025) and used before the end of the current leave year (January 10, 2026), or they will be forfeited. The Office of Personnel Management defines the leave year as beginning on the first day of the first full biweekly pay period in a calendar year and ending the day before the first full biweekly pay period of the following year. Because some agencies use varying payroll schedules, employees should confirm their specific leave year dates with their agency payroll office.
If a federal employee retires before the start of the next leave year, they will receive a lump-sum payment for any unused annual leave remaining in their account. This includes leave that exceeds the carry-over limit, provided the retirement is effective before the new leave year begins. That payment can serve as a valuable financial bridge while waiting for interim annuity payments to start, especially since recent increases in retirement applications have resulted in longer processing times than expected.
For personalized guidance on how to maximize your annual leave planning and retirement strategy, reach out to a Federal Retirement Consultant (FRC®) who specializes in your unique benefits.
