The one number most calculators skip
Most retirement checklists say “you’ll get a lump-sum payment for unused leave.” This calculator gives you a current-salary estimate — including the hourly rate (salary ÷ 2,087, rounded to cent), estimated federal supplemental withholding (22%), and full FICA. On 240 hours at a $100,000 salary: gross $11,500.80, net $8,090.81.
How the formula works (5 U.S.C. § 5551)
The lump-sum leave payment is governed by statute. Under 5 U.S.C. § 5551 and implementing regulations at 5 CFR Part 550, Subpart L, your payout equals:
Gross Payout = Leave Hours × Hourly Rate of Basic Pay
Hourly Rate = Annual Salary ÷ 2,087
(rounded to the nearest cent; 2,087 is the federal annual-hours divisor)
The 2,087-hour divisor is fixed by statute — it represents 52 weeks × 40.136… hours (the OPM legislatively rounded work year). It does not change year to year. The rounding matters: $100,000 ÷ 2,087 = $47.9156…, which rounds to $47.92 — not $47.91. Multiplied by 240 hours, the difference is $2.40. Payroll systems round the hourly rate first; this calculator does the same.
“Annual Rate of Basic Pay” includes base GS pay plus locality pay (and special rate supplements if applicable). Under 5 CFR 550.1205(b), the lump sum also counts law enforcement availability pay (LEAP), administratively uncontrollable overtime and standby premium pay, supervisory differential, and nonforeign cost-of-living allowances and post differentials. This calculator does not add any of those, so law enforcement officers and others who receive them should add the annual amount to the salary they enter. Ordinary overtime and holiday pay are not included. CSRS employees who are not under Social Security (non-Offset) should ignore the Social Security line, which does not apply to them. Part-time employees should enter their hourly rate times 2,087 as the annual salary, not actual part-time earnings.
FedTools 2026 worked example — verified to the cent
$100,000 salary · 240 hours · No prior wages · No state tax
Worked example: $100,000 salary, 240 leave hours, to-the-cent breakdown| Line Item | Amount |
|---|
| Annual salary | $100,000.00 |
| Hourly rate (÷ 2,087, rounded to cent) | $47.92 |
| Leave hours | 240 |
| Gross payout | $11,500.80 |
| Federal withholding (22%) | −$2,530.18 |
| Social Security (6.2%) | −$713.05 |
| Medicare (1.45%) | −$166.76 |
| State tax | $0.00 |
| Net payout | $8,090.81 |
Source: OPM Fact Sheet — Lump-Sum Payments for Annual Leave; IRS Publication 15 (2026); SSA 2026 COLA Fact Sheet ($184,500 SS wage base). FedTools 2026 original analysis.
Annual leave carryover ceilings by employee category
The ceiling applies at the start of the leave year — it does not cap your lump-sum payout.
Annual leave carryover ceilings by employee category| Employee Category | Carryover Ceiling |
|---|
| Most GS/FERS employees (U.S.-based) | 240 hours (30 days) |
| Employees stationed overseas | 360 hours (45 days) |
| Senior Executive Service (SES, SL, ST) | 720 hours (90 days) |
Source: OPM Fact Sheet — Annual Leave for Federal Employees.
Annual leave accrual rates by years of service
Final-year accruals are added to your carryover balance — both are paid out at separation. An employee retiring mid-year receives a pro-rated amount of the annual accrual.
Annual leave accrual rates by years of service| Years of Service | Accrual Rate | Max Annual Accrual |
|---|
| 0–2 years | 4 hrs/pay period | 104 hrs |
| 3–14 years | 6 hrs/pay period (10 hrs in the last pay period of the year) | 160 hrs |
| 15+ years | 8 hrs/pay period | 208 hrs |
Maximum theoretical payout (15+ years, standard GS, year-end retirement): 240 carryover + 208 final-year accrual = 448 hours. At GS-13 Step 5 Washington DC locality ($138,024/yr, $66.14/hr), that is $29,630.72 gross.
The January retirement timing advantage
Under 5 CFR Part 550, Subpart L, your payout is calculated as the pay you would have received had you remained employed through the expiration of the projected leave period. If a general pay raise or other systemwide pay adjustment takes effect while your leave period is projected forward, hours on or after that effective date are paid at the new rate.
This is why “retire in January” appears in every federal retirement guide. An employee with 300 hours of leave who retires in December projects their leave into January — some hours are automatically paid at the new rate. Retiring in early January means the entire balance is paid at the new rate.
FedTools 2026 estimate: For an employee with 350 hours of leave on a $120,000 salary, a 1% general pay increase adds at most about
$200 to the gross payout ($57.50 to $58.07 an hour across all 350 hours; less when only some hours project past the new rate's effective date). The calculator above does not prorate that future raise; enter the applicable salary you want to model. Use the
FERS Retirement Date Optimizer to compare retirement-date tradeoffs.
How the lump sum is taxed — supplemental wage rules
IRS Publication 15 treats an annual lump-sum payment for unused leave as supplemental wages when it is paid in addition to regular wages. That classification drives the withholding estimate used here:
- Federal income tax: 22% flat-rate estimate (IRS Pub 15, 2026 — optional flat method for separately identified supplemental wages under $1 million when regular wages had withholding). Payroll may instead use the aggregate withholding method. This is withholding, not a ceiling; your effective tax rate is determined by your full-year income on Form 1040.
- Social Security: 6.2% employee share, applied to wages up to the 2026 wage base of $184,500. If your salary alone already approaches $184,500, the SS withholding on your payout will be reduced or zero.
- Medicare: 1.45% employee share on the full payout — no wage base ceiling. Employers withhold the additional 0.9% Medicare tax once employee wages exceed $200,000, regardless of filing status; final liability is reconciled on Form 1040.
- State income tax: Most states tax lump-sum leave payments. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no broad income tax.
Withholding vs. final liability: The 22% federal withholding shown here is a common flat-rate supplemental wage estimate. Your actual tax is computed on Form 1040 based on your total income and deductions. If the lump sum pushes you into a higher bracket only temporarily, you may owe more than 22%. If your overall effective rate is below 22%, you receive a refund of the over-withheld amount. Consult a tax advisor for retirement-year planning.
Phased retirement and special circumstances
Phased retirement: If you enter OPM's phased retirement program, your annual leave stays on the books — you do not receive a lump-sum payout when entering phased retirement. The payout occurs at full retirement when the phased retirement arrangement ends.
Within-grade increases (WGI): If a scheduled WGI would have taken effect during your projected leave period, the regulations entitle you to the next step's hourly rate for those hours. Payroll offices handle this calculation automatically. If you are unsure, enter the next step in the GS lookup or add the expected WGI to your direct salary input.
Law enforcement officers (LEOs): Law Enforcement Availability Pay (LEAP) is included in basic pay for lump-sum purposes under the OPM definition. If you receive LEAP, your salary already includes it — enter your full LEAP-inclusive salary via the direct input.
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