Terminal Leave or Selling Back Leave Explained

You leave with accrued leave on the books, and you have two ways to use it.

Terminal leave — you take the leave. You stay on active duty, drawing full pay and allowances, while not working. You can start a civilian job during it in most circumstances, which means being paid twice for the same weeks.

Selling it back — you take cash instead. Two limits matter: you may sell back a maximum of 60 days over your entire military career, and it is paid at your base pay rate only — no BAH, no BAS, no special pays.

That second point is what usually settles it. Allowances can be a substantial share of your total compensation, and selling leave back forfeits them entirely for those days. Terminal leave pays them.

You can sell leave back when you reenlist, when you extend, or when you separate — and the 60 days is cumulative across all of those occasions, not per occasion.

Who is eligible?

Anyone separating or retiring with accrued leave. The 60-day career cap applies to everyone, and it is a lifetime figure — if you sold leave back at a previous reenlistment, that came out of the same 60.

Special Leave Accrual rules affect how much leave you can carry in the first place, and those have changed: the SLA cap was 60 days before September 30, 2023, and members who exceeded a 90-day balance on December 31, 2022 may have until September 30, 2026 to use it. If you are carrying a large balance, check your own position rather than assuming.

Tax treatment differs between the two, and that is worth confirming with your finance office for your circumstances — sold-back leave is paid as a lump sum, which affects withholding.

How do I apply?

  • Check how much of the 60 days you have already used: It is a career total. A previous sell-back at reenlistment counts against it.
  • Compare total compensation, not base pay: Terminal leave pays allowances; sold-back leave does not. For most people that makes taking the leave worth more.
  • Look at whether you can start work during terminal leave: Being paid by both at once is the strongest argument for taking it.
  • Talk to your finance office about withholding: A lump sum sell-back is withheld differently from regular pay.
  • Check your carried balance against the SLA rules: If you are holding a large balance, the use-or-lose position may be more urgent than the sell-back question.
  • Plan it into your out-processing timeline: Terminal leave extends your last day on the books, which affects your TRICARE end date and your CHCBP window.

Common questions

How much leave can you sell back?

A maximum of 60 days over your entire military career, cumulative across reenlistments, extensions and separation.

Is sold-back leave paid at full pay?

No. It is paid at your base pay rate only, with no BAH, BAS or special pays — which is why terminal leave is usually worth more.

Can you work a civilian job during terminal leave?

In most circumstances yes, which means drawing military pay and allowances alongside a civilian salary. Check your own service's rules.

Does terminal leave affect your TRICARE end date?

Yes. Terminal leave extends your last day on the books, which moves your coverage end date and therefore your CHCBP window.

Is sold-back leave taxed?

It is taxable income paid as a lump sum, so withholding differs from regular pay. Confirm the detail with your finance office.

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