Terminal leave in the military is the block of accrued leave a service member takes immediately before separating or retiring, with no return to duty afterward. You stay on active duty status the entire time, which means full base pay, BAH, BAS, and benefits continue until your official separation date. Most separating members have between 30 and 60 days available, depending on how much leave they’ve banked.
How the Leave You’d Use Accrues
Active duty members earn 2.5 days of leave per month, or 30 days per year, at the same rate across all branches. Reserve and National Guard members on active duty orders accrue the same way.1Office of the Law Revision Counsel. 10 USC 701 – Entitlement and Accumulation2Military OneSource. Military Leave: What It Is and How It Works
The standard carryover cap is 60 days. Anything above 60 days at the end of a fiscal year (October 1) is forfeited under use-or-lose rules. Special Leave Accrual can let you carry an additional 30 days if operational demands kept you from taking leave, for a combined ceiling of 90 days.1Office of the Law Revision Counsel. 10 USC 701 – Entitlement and Accumulation3Air Force. DAF Announces Updates to Military Leave Program
Your current balance is on your Leave and Earnings Statement. The “ETS BAL” field projects the balance you’ll have at your Expiration Term of Service date, which is the number that matters when planning terminal leave.4DFAS. Army Reading Your LES
Take Terminal Leave or Sell It Back?
You don’t have to take terminal leave. You can sell back unused days, or combine both by taking some leave and selling the rest. The right choice depends on your finances, your next job, and how much runway you need for the transition.
Why Taking It Usually Pays More
On terminal leave you receive your full paycheck: base pay, Basic Allowance for Housing, and Basic Allowance for Subsistence. When you sell back leave, you get only base pay divided by 30 for each day sold. BAH and BAS are not part of the sell-back calculation, so a day taken as leave is worth noticeably more than a day sold.
Sold-back leave is also treated as supplemental wages and withheld at a flat 22% federal rate.5IRS. 2026 Publication 15-B Employer’s Tax Guide to Fringe Benefits You may recover some of that at tax time depending on your total income, but the upfront reduction is real.
When Selling Back Fits Better
Selling back can be the smarter move if you have a civilian job lined up that pays well and starts soon, or if your command won’t approve a long leave block because of operational needs. A career cap of 60 days applies to total leave sold back across all reenlistments and separations. Enlisted members can sell back at reenlistment or separation; officers can only sell back at separation.6Military Compensation and Financial Readiness. Leave Benefits During Transition
Who Loses the Option
Members discharged under other-than-honorable conditions forfeit all accrued leave. The same applies to anyone separated in lieu of court-martial, anyone receiving a punitive discharge, and enlisted members separated for misconduct. Anyone discharged before completing six months of active duty for failure to serve satisfactorily also forfeits the balance.7DoD Issuances. DoD Instruction 1327.06 – Military Leave, Liberty, and Administrative Absence
Getting It Approved
Terminal leave is granted at your command’s discretion, not as an automatic entitlement.2Military OneSource. Military Leave: What It Is and How It Works Most reasonable requests get approved. Denials typically involve unfinished disciplinary proceedings, critical operational needs, or incomplete out-processing.
Paperwork and timelines vary by branch and unit, but the shape of the process is consistent. You submit a leave request through your unit’s admin chain, usually at least 30 days before the start date. Expect to show proof that you’ve completed transition counseling (DD Form 2648), your medical and dental clearances, and your installation out-processing checklist. Leave blocks longer than 90 days generally require higher-headquarters approval. Get the request in early; separations-office backlogs are common and delays can eat into your leave.
What Continues While You’re on Terminal Leave
Pay and Allowances
Your paycheck doesn’t change. Base pay, BAH, and BAS continue through your official separation date. Special or incentive pays like flight pay or special duty assignment pay also continue unless termination orders arrive before separation.8U.S. Army Financial Management Command. Fort Novosel Separation / Retirement Briefing
One quirk catches people off guard: BAH is paid based on your permanent duty station ZIP code, not wherever you actually spend your terminal leave.9Military Compensation and Financial Readiness. Basic Allowance for Housing Moving from a high-cost base to a cheaper area works in your favor. The reverse can pinch. Single members who lived in the barracks become eligible for BAH at the without-dependents rate once they start terminal leave and clear the barracks.8U.S. Army Financial Management Command. Fort Novosel Separation / Retirement Briefing
TRICARE
TRICARE stays active through your last day of terminal leave because you’re still on active duty. After separation, you and your family qualify automatically for the Transitional Assistance Management Program, which provides 180 days of continued TRICARE coverage at no premium.10TRICARE. Transitional Assistance Management Program Use those six months to line up employer coverage or VA healthcare.
UCMJ Still Applies
You remain subject to the Uniform Code of Military Justice until the moment your active duty ends. The UCMJ specifically covers members “awaiting discharge after expiration of their terms of enlistment.”11Joint Service Committee on Military Justice. Uniform Code of Military Justice A serious offense during terminal leave can result in your command recalling you for disciplinary action. It’s uncommon, but the authority is there.
State Taxes
Because you’re still on active duty, the Servicemembers Civil Relief Act keeps your military pay taxed by your state of legal residence rather than the state you may be living in. Non-military income you earn during terminal leave, such as wages from a civilian job, may be taxable in the state where you earn it.
Working a Civilian Job During Terminal Leave
You can, and many people do. The rules differ by employer type and by rank.
Private-Sector Jobs
Enlisted members can start a private-sector job during terminal leave without significant legal restrictions beyond the UCMJ obligation to avoid conduct that discredits the military. Officers face tighter rules. Federal ethics statutes at 18 U.S.C. 203 and 205 restrict officers from acting as agents or attorneys for others in matters involving the federal government, so officers on terminal leave should generally avoid work that involves representing an employer to the government. Retiring officers should also review 18 U.S.C. 207, which imposes post-employment restrictions on certain lobbying and representational activities.
Federal Civilian Jobs
A service member on terminal leave under honorable conditions can accept a federal civilian position and draw both military pay and civilian pay at the same time.12Office of the Law Revision Counsel. 5 USC 5534a – Dual Employment and Pay During Terminal Leave From Uniformed Services This dual-compensation exception is unusual in federal pay law. You also begin accruing civilian annual leave right away.13U.S. Office of Personnel Management. Can I Work for the Federal Government While on Terminal Leave? If a federal job is on the table, time your terminal leave with that overlap in mind.
Adding Permissive TDY
Permissive Temporary Duty is a separate block of non-chargeable days for house hunting and job searching. It does not come out of your leave balance. Retiring members can receive up to 20 days of PTDY; involuntarily separating members can receive up to 10.14MyNavy HR. MILPERSMAN 1320-220 Permissive Temporary Duty (PTDY) Authorization for Job/House Hunting
PTDY can be combined with terminal leave to extend your total time away from duty before separation. The PTDY portion is typically taken after you finish separation processing and before terminal leave begins.14MyNavy HR. MILPERSMAN 1320-220 Permissive Temporary Duty (PTDY) Authorization for Job/House Hunting Ask about it. People who don’t know it exists often skip free transition time.
The Day Terminal Leave Ends
Separation Date and the DD-214
Terminal leave ends on your official separation or retirement date. On that day your active duty status ends and you receive DD Form 214, Certificate of Release or Discharge from Active Duty.15National Archives. DD Form 214 Discharge Papers and Separation Documents Keep it safe. It verifies your service for VA healthcare, GI Bill education benefits, VA home loan eligibility, and burial benefits.16Veterans Affairs. Complete List of Discharge Documents Make several certified copies and store them in different places. Replacing a lost DD-214 through the National Archives is possible but slow.
Unemployment Compensation
Veterans may qualify for Unemployment Compensation for Ex-Servicemembers, a federally funded program administered by each state. You cannot file a UCX claim until the day after the date shown on line 12b of your DD-214, so you cannot collect unemployment while still on terminal leave.17The Official Army Benefits Website. Unemployment Compensation If you’re receiving military retirement pay, many states reduce your unemployment benefit by a prorated share of that retirement income. Contact your state’s unemployment office early to see what documentation you’ll need.
Health Coverage After TAMP
Once the 180-day TAMP window closes, you need a new plan. Options include employer-sponsored insurance, TRICARE Reserve Select for Guard and Reserve members, VA healthcare if you have a service-connected disability rating or meet income thresholds, or a marketplace plan. Six months goes quickly, and a gap right when you’re building civilian life is avoidable with a little planning.