Annual Leave for Federal Employees: Accumulation and Retirement

Accumulation of Annual Leave

For full-time employees employed for less than three years, half of a day of annual leave is accrued each pay period (4 hours every two weeks), totaling 13 days, or 104 hours, every year.

With 3 to 15 years of service, full-time federal employees get ¾ days of annual leave each pay period (6 hours biweekly) except for the last period of the year, when they receive 1.25 days, or 10 hours, in annual leave.

A full-time federal employee with 15 or more years of service earns one day (8 hours) per pay period. Any accrual rate change that occurs when an employee exceeds the 3-year or 15-year threshold starts at the onset of the first pay period after the employee has completed the needed service time.

Part-time employees with less than three years of service accumulate 1 hour of annual leave for every 20 hours in their pay statuses. This increases to 1 hour for every 13 hours in a pay status with 3 to 15 years of federal service and 1 hour for every 10 hours worked with 15 years or more.

For “uncommon tours of duty,” 4, 6, or 8 hours is multiplied by the number of hours in a biweekly pay period, divided by 80. Those in the Senior Executive Service (SES), the Senior Level pay scale, in Scientific or Professional (ST) occupations, or similar employees as determined by OPM – all earn 8 hours per pay period regardless of their time in service.

Temporary employees can begin accruing annual leave after working 90 consecutive days, and they are credited for the annual leave they would have earned in their initial 90 days, should they reach that point. Intermittent workers, on the other hand, are not eligible for any annual leave.

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Using Annual Leave

Annual leave generally covers paid time off for vacations, rest, relaxation, and other personal business matters or emergencies. The employee and his or her supervisor are equally responsible for monitoring the use of annual leave.

Unlike sick leave, only a maximum amount of annual leave carries over from year to year. Suppose an employee promptly requests the use of his or her annual leave, and the supervisor fails to approve the request in a timely fashion or denies the request without following up with the employee on another date to use the leave. In that case, these hours might be restored beyond the maximum carry-over due to administrative error.

Similarly, suppose an annual leave request is approved, but then on the day it was scheduled, either inclement weather or an executive order makes the date a non-workday. In that case, the annual leave hours are not deducted from the employee’s balance. It is then the supervisor’s responsibility to follow up with the employee about taking that leave at a later date.

For federal employees working within US borders, the maximum annual leave that can be carried over from one year into the next is 240 hours (30 days). Feds outside of the US can carry over 45 days (360 hours) year-to-year, and for SES, SL, and ST positions, 90 days (720 hours) can be retained at the end of a calendar year. Everything over the limit is considered “use-it-or-lose-it” and, if unused, is surrendered at the end of a calendar year’s last pay period.

Lump Sums and Retirement

There are two situations where an annual leave balance can be cashed out as a lump sum payment: 1) when an employee enters active duty in the Armed Forces and 2) at retirement. Because, in theory, a federal employee could have 240 hours from a previous year and 240 hours from the current year, he could cash out up to 440 hours should he retire on December 31st. This is the prominent reason why there is a surge of retirement claim applications in OPM’s backlog every December and January.

**Written by Dan Sipe. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Dan Sipe and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.