Sick Leave
Conversion.
Your unused sick leave at retirement isn't wasted — it converts directly into additional creditable service, increasing your lifetime annuity. Understanding exactly how many hours translate into months, and how that affects your annuity calculation, helps you time your retirement precisely.
Your sick leave
isn't lost at retirement.
Unlike annual leave, which is paid out in a lump sum when you retire, sick leave has no cash value. But it isn't wasted either — every hour of unused sick leave converts into additional months of creditable service, which directly increases your retirement annuity.
When you retire, any unused sick leave is added to your total years of creditable service before your annuity is calculated. The conversion uses a standard of 2,087 hours per work year — meaning approximately 174 hours of sick leave equals one additional month of service credit.
That extra month — or six months, or a full year — increases your annuity based on the applicable multiplier (1% or 1.1% for FERS, the tiered rate for CSRS). The impact compounds over the lifetime of the annuity and is protected by COLAs going forward. Many federal employees with large sick leave balances significantly underestimate how much this benefit is worth.
Unused sick leave cannot be cashed out — but it can be converted into a permanent annuity increase. Every hour you save matters.
The rules changed significantly for FERS employees in 2014. Prior to January 1, 2014, FERS employees only received 50% credit for their unused sick leave. Since 2014, FERS employees receive full credit — the same as CSRS employees have always received.
The conversion
calculation.
The conversion is straightforward: your sick leave balance in hours is divided by 2,087 to get additional years, then the remainder is converted to months and days. Those are added to your civilian service total before the annuity formula is applied.
Sick leave conversion formula
Note: The calculation produces years, months, and days. Any days remaining after full months are dropped — only complete months count. 2,000 hours ÷ 2,087 = 0.9585 years = 11 months + 14 days → 11 additional months of service credit.
CSRS Sick Leave
Civil Service Retirement System
FERS Sick Leave
Federal Employees Retirement System
Hours to months
reference table.
Use this table to quickly estimate how many months of additional service your sick leave balance will generate. Find your approximate balance in the left column and read across for the service credit and annuity impact.
| Sick leave hours | Additional service credit | FERS annuity increase (1% × $80K high-3) | CSRS annuity increase (2% × $80K high-3) |
|---|---|---|---|
| 174 | 1 month | +$67/yr (+$5.58/mo) | +$133/yr (+$11.11/mo) |
| 348 | 2 months | +$133/yr (+$11.11/mo) | +$267/yr (+$22.25/mo) |
| 522 | 3 months (¼ year) | +$200/yr (+$16.67/mo) | +$400/yr (+$33.33/mo) |
| 696 | 4 months | +$267/yr (+$22.25/mo) | +$533/yr (+$44.42/mo) |
| 870 | 5 months | +$333/yr (+$27.75/mo) | +$667/yr (+$55.58/mo) |
| 1,044 | 6 months (½ year) | +$400/yr (+$33.33/mo) | +$800/yr (+$66.67/mo) |
| 1,305 | 7.5 months | +$500/yr (+$41.67/mo) | +$1,000/yr (+$83.33/mo) |
| 1,566 | 9 months (¾ year) | +$600/yr (+$50.00/mo) | +$1,200/yr (+$100/mo) |
| 1,740 | 10 months | +$667/yr (+$55.58/mo) | +$1,333/yr (+$111/mo) |
| 2,087 | 12 months (1 full year) | +$800/yr (+$66.67/mo) | +$1,600/yr (+$133/mo) |
| 2,610 | 15 months (1¼ years) | +$1,000/yr (+$83.33/mo) | +$2,000/yr (+$166.67/mo) |
| 4,174 | 24 months (2 full years) | +$1,600/yr (+$133.33/mo) | +$3,200/yr (+$266.67/mo) |
* FERS calculation based on 1% multiplier × $80,000 high-3 × fractional years. CSRS uses Tier 3 (2%) rate for service beyond 10 years. Actual amounts vary by individual high-3 salary and total service tier.
What a full year of sick leave credit is actually worth
On a $100,000 high-3 average salary: one full year of sick leave credit (2,087 hours) adds $1,000/year ($83/month) to a FERS annuity — permanently, indexed to future COLAs. Over a 25-year retirement that's over $25,000 in additional benefits (before COLA adjustments). CSRS retirees at the 2% tier get double: $2,000/year from the same sick leave balance.
The higher your salary, the more each hour of sick leave is worth. An employee with a $120,000 high-3 gets $1,200/year in FERS annuity increase from a single year of sick leave credit.
Timing retirement
around sick leave.
Because sick leave converts in complete months, your retirement date affects how much credit you actually receive. A few days' difference can cost or gain you a full month of annuity increase.
Since only complete months count in the conversion, partial months are dropped. If you have 350 hours of sick leave, that converts to 2 months plus 2 hours — and those 2 extra hours add nothing. However, if you could work a few more days and reduce your sick leave balance to exactly 348 hours (or keep it above 348 so the remainder rounds to a complete month), you optimize the credit.
More practically, many employees near retirement focus on building their sick leave balance rather than using it — since it cannot be cashed out, every hour used before retirement is a permanent annuity reduction for life.
The "sick leave hour is worth more than an annual leave hour" rule
Annual leave can be cashed out at retirement — one hour of annual leave = one hour of your final salary rate, paid as a lump sum. Sick leave converts to service credit and generates annuity income for life. At higher income levels and longer retirements, sick leave hours can ultimately be worth more in lifetime value than annual leave hours. Neither should be wasted — but the tradeoff is worth understanding.
What sick leave credit does NOT do
Sick leave credit does not count toward retirement eligibility — you must still meet the age and service requirements based on civilian and qualifying military service alone. It does not affect your high-3 average salary calculation. And it cannot be used to meet the 5-year FERS or CSRS civilian service minimum. It only adds to your service total after all eligibility requirements are already met.
OPM guidance
& references.
Official OPM sick leave credit guidance, annuity calculators, and leave tracking tools for federal employees planning their retirement date.