Unused annual leave payout


Q. Is lump-sum annual leave money paid to CSRS employees after they retire added in as part of our salary for the year we retire to be included in our final benefits calculations?

A. Your lump-sum payment for unused annual leave has nothing to do with your retirement annuity calculation. It’s simply a payment for leave you could have taken but didn’t. As such, it will be treated as earned income for tax purposes.


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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 fedexperts@federaltimes.com.

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