Lump-sum calculation


Q: I am a CSRS dentist with more than 36 years of government service and I am about to retire. I have 80 days (not hours) of annual leave for which I should receive a lump-sum payment upon retirement from my local VA medical center, minus income tax and other deductions. My local payroll office tells me that although they will use my base and market pay to determine my annual salary, that salary will be divided by 364 days (instead of 261 days) to determine my daily and hourly rate. This doesn’t seem correct, as my ability to earn annual leave was reduced four years ago from 30 days per year to 26, and my tour of duty is 261 days per year. What is the correct way for my local payroll office to determine the value of the 80 days of accrued unused annual leave for which I should receive a lump-sum payment?

A: According to OPM, “An agency calculates a lump-sum payment by multiplying the number of hours of accumulated and accrued annual leave by the employee’s applicable hourly rate of pay, plus other types of pay the employee would have received while on annual leave, excluding any allowances that are paid for the sole purpose of retaining a Federal employee in Government service (e.g., retention incentives and physicians comparability allowances).” For a complete run-down on lump-sum leave payments, go to


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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