Terminal Leave Calculator — Sell Back Leave or Take It?

When you separate, retire, or reenlist, you can be paid for unused accrued leave under 37 U.S.C. § 501. Three rules make sell-back less valuable than most people expect:

• Basic pay only. Each day sold pays 1/30 of your monthly basic pay. No BAH, no BAS, no special or incentive pays (37 U.S.C. § 501(b)(1)).
• It's taxed. The payment is taxable wages — federal income tax is withheld (typically at the flat 22% supplemental rate), plus Social Security and Medicare.
• 60-day career cap. Under 37 U.S.C. § 501(f), you can be paid for at most 60 days of leave across your entire career (counting sell-backs after February 9, 1976). Days sold at earlier reenlistments count against the cap. Limited exceptions exist for leave earned during contingency operations.

Terminal leave (also called transition leave or separation leave) means using your accrued leave at the very end of your service so your last day of leave lands on your separation date. Because you remain on active duty the whole time:

• Your full paycheck continues — basic pay plus BAH and BAS, and generally any special pays you're otherwise entitled to. BAH and BAS are tax-free allowances.
• Benefits continue — TRICARE, base access, and your other active-duty benefits run through your separation date.
• You keep accruing leave — 2.5 days per month of active service under 10 U.S.C. § 701(a), even while on terminal leave.
• No statutory day cap — but your leave request must be approved by your command like any other leave, and service policies differ on how much terminal leave commanders should approve.

Many members also start civilian employment while on terminal leave. Rules vary — especially for federal civilian jobs and for retiring officers subject to post-service employment restrictions — so clear it with your legal/ethics office first.

For the same number of days, both options pay identical basic pay. The difference is everything stacked on top:

With BAH in the picture, terminal leave typically comes out hundreds to thousands of dollars ahead per month of leave. Selling can still make sense when:

• Your new job starts immediately and you'd rather have the lump sum on top of your new salary than delay your start date.
• You'd lose the days anyway — you generally can't carry more than 60 days past the fiscal year end (10 U.S.C. § 701(b), with special leave accrual exceptions), so a big balance plus a far-off separation date can create use-or-lose pressure.
• Mission or command constraints keep your terminal leave request from being approved for the full balance.

And remember: you can split — take part of your balance as terminal leave and sell the rest, within the 60-day sell cap.

The VA's Benefits Delivery at Discharge (BDD) program lets you file your disability claim between 180 and 90 days before you leave the military, so a decision can be ready shortly after separation. Inside 90 days you can still file, but as a standard pre-discharge claim instead. Details: VA pre-discharge claims.

Your SGLI coverage continues free for 120 days after you leave the military, then stops. You can convert to VGLI within 1 year and 120 days of separation — and if you apply within 240 days, no proof of good health is required. Details and rates: VA.gov VGLI.

Active-duty TRICARE ends when you separate (retirees have their own options). Your bridges:

• TAMP — certain separations (e.g., involuntary, some Guard/Reserve deactivations) qualify for 180 days of transitional TRICARE at no premium. Check your eligibility with your service and on TRICARE.mil.
• CHCBP — premium-based continued coverage (similar to TRICARE Select) for up to 18 months for separating members. You must enroll within 60 days of losing TRICARE eligibility: TRICARE CHCBP.
• VA health care — apply as soon as you separate: VA health care application.

Your TSP account remains yours after separation and keeps growing with the market, but payroll contributions end with your final paycheck — there's no way to contribute to TSP from civilian pay (you can roll eligible outside retirement money in). If you have an outstanding TSP loan, deal with it before or shortly after separation or it can be declared a taxable distribution under TSP loan rules. Details: tsp.gov.

Before you lose easy access to myPay, download your LES history and W-2s, and check your final LES for: correct leave balance and leave settlement, any unpaid travel or allowances, and any debts being collected. Pay errors are far easier to fix while your finance office still owns your record. Your DD-214 leave block should match what you were actually paid or took.

Sold leave is paid at 1/30 of your monthly basic pay per day, based on your pay grade and years of service on your separation date.

Under 37 U.S.C. § 501, the payment is basic pay only — it does not include BAH, BAS, or special pays — and it is taxable income.

37 U.S.C. § 501(f) caps paid leave at 60 days over your entire military career (counting payments made after February 9, 1976).

If you sold 30 days at a reenlistment, you can only sell 30 more at separation or retirement. Limited exceptions exist for leave accrued during contingency operations.

Yes. On terminal leave you remain on active duty through your separation date, so your full paycheck continues: basic pay plus BAH, BAS, and most special pays.

BAH and BAS are non-taxable allowances — in 2026, BAS alone is $476.95/month for enlisted members and $328.48/month for officers (DFAS). That tax-free stack is why taking the leave usually beats selling it.

Yes. A leave sell-back is taxable wages. Federal income tax is withheld — typically at the flat 22% supplemental-wage withholding rate — plus Social Security and Medicare (FICA). State income tax may also apply depending on your state of legal residence.

Yes, you can split — for example, take 20 days of terminal leave and sell 20 days — subject to command approval of your leave request and the 60-day career cap on sold leave.

Terminal leave itself has no statutory day cap, but it must be approved like any other leave, and approval norms vary by service and command.

Yes. You are still on active duty while on terminal leave, so you continue to accrue leave at 2.5 days per month under 10 U.S.C. § 701(a). A 60-day terminal leave period adds roughly 5 more days to your balance.

No. Terminal leave and leave sell-back settle the unused leave you earned. Involuntary separation pay is a different benefit under 10 U.S.C. § 1174 — a lump sum for members involuntarily separated with at least 6 years of service.

You can receive a leave settlement and separation pay in the same final paycheck if you qualify for both. Estimate the latter with the Separation Pay Calculator.