Military Terminal Leave: 13 FAQs and Expert Answers

Can you believe how fast time flies? Whether you’ve put in four years or a full twenty, that transition light at the end of the tunnel is finally getting bright. You’ve put the work in, earned your rank, and now you’re approaching the finish line.

But before you hang up the uniform for good, one major decision remains: how to handle your terminal leave. Getting it right can mean the difference between a stressful transition and a bumpy ride. As a token of our gratitude, we’ve put together a list of the most important terminal leave questions and answers to help you start your next phase of life.

13 Terminal Leave FAQs and Really Good Answers for Them

What Exactly is Terminal Leave?

For military service members, terminal leave, otherwise known as transition leave, is the final block of unused leave you are granted before your official separation or retirement date.

While you’re on leave, you are still on active duty, but have finished your out-processing and are no longer required to report back to work. For all intents and purposes, you are transitioning into civilian life. The major benefit is that you continue to receive your pay and other benefits during this time, but do not have to work.

The Best Sitrep for Today's Vets.

Benefits intel, military tech, field-tested gear, untold stories of those who served, and history like you've never heard before. Sign up for the VeteranLife newsletter.

​

Subscribe

Always free. 🇺🇸 | Unsubscribe anytime.

Many service members use their accumulated leave as a financial buffer, giving them a head start on house hunting, starting a new career, or going on a well-deserved vacation. Check here for branch-specific policies regarding terminal leave:

• Army: AR 600-8-10
• Air Force: DAFI 36-3003
• Marine Corps: MCO 1050.3J
• Navy: MILPERSMAN 1050-120

How is Terminal Leave Calculated?

Military service members earn 30 days of paid leave each year. Your balance starts at zero and accrues monthly at 2.5 days per month, totaling 30 days per year.

The maximum amount of leave you can carry over from one year, starting October 1st, to the next is 60 days. Any unused leave over 60 days is generally lost, so make sure to use it or lose it. Your monthly Leave and Earning Statement (LES) will list how much leave you have available.

If you were in any deployments that prevented you from taking leave due to operational requirements, you may be able to carry over up to 90 days under the Special Leave Accrual (SLA) program, per recent updates in the FY23 NDAA.

Can Your Terminal Leave Get Denied?

Terminal leave is a privilege, not an entitlement. Your commanding officer (CO) has the final authority to accept, deny, or even shorten your leave.

Most often, it comes down to operational needs, the unit being short-staffed, or unresolved administrative and disciplinary issues. Since the final decision rests with your CO, be proactive with your out-processing and keep your chain of command in the loop to give yourself the best shot at approval.

Can You Work Another Job While on Terminal Leave?

Yes, you are legally allowed to start working in the private sector while on terminal leave.

It is a great opportunity to double dip and start a new career while still receiving your full military pay and benefits. However, keep in mind that you are technically still on active duty until your actual separation date.

This means you still have to follow all military regulations, including obtaining command approval for off-duty employment to ensure your new role does not create a conflict of interest.

Should You Sell Back Leave or Take Terminal Leave?

Choosing between selling back your leave or taking terminal leave is a personal decision that depends on your financial goals and timeline. By taking terminal leave, you have an opportunity to double dip by working a civilian career while still receiving your full basic pay, allowance for housing (BAH), and allowance for subsistence (BAS) until your final separation date.

Conversely, if a member decides to sell back leave, they would receive a gross lump-sum payment for those unused days, which can provide a nice buy-out at the end of their service.

However, you must remember there is a strict 60-day lifetime limit on selling back leave across your entire military career. If you sold back 30 days during a previous reenlistment, you can only sell back 30 days now.

For instance, an E-6 with 10 years of service earns a monthly basic pay of, let’s say, $4,759.50, which breaks down to $158.65 per day. If they choose to sell back 60 days of leave, they would earn a gross lump-sum payment of $9,519.00.

However, sold leave is subject to a higher federal tax rate of 22%, so the actual check would look more like $7,424.82. Also, remember that unlike terminal leave, a leave sell-back only pays out your basic pay, and you do not get any allowances like BAH or BAS for those days.

Here’s the bottom line: if you have a job or school lined up, taking terminal leave is usually the best financial move because it allows you to collect full military pay with allowances while earning a civilian paycheck or getting a head start on new opportunities.

If you don’t have any plans waiting for you once you’re out, selling back your leave can be a great option, too. By working until your final day, you continue to get pay and benefits, and then, once you’re out, you take home a nice payout.

What Is the Difference Between Terminal Leave and Permissive Temporary Duty (PTDY)?

Permissive Temporary Duty (PTDY)—now often referred to as a Transition Absence—is an administrative absence that does not count toward your leave days. It typically provides an additional 20 days (CONUS) or 30 days (OCONUS) of paid time off, so you can seal the deal on any transition activities.

Just like terminal leave, you need explicit permission to take PTDY from either your unit commander or battalion commander. Keep in mind that while you will continue to receive full pay and allowances, the military will not cover any travel expenses.

Additionally, PTDY is generally reserved for retirees or service members facing involuntary separation; standard end-of-term-of-service (ETS) separations typically do not qualify. This makes it a great opportunity to stack it along with your terminal leave for extra time off.

What Happens to Your Healthcare (TRICARE) While on Terminal Leave?

During this time, you and your dependents remain covered by TRICARE until midnight on your date of separation. However, try to finish any final medical and dental appointments before you start terminal leave.

Completing all medical and dental appointments before starting terminal leave ensures any conditions are documented in your service record for your VA claim.

If you wait to take any appointments during terminal leave, you risk missing documentation needed for future benefits.

What Happens If You Get in Trouble During Terminal Leave?

While on terminal leave, we hope you have fun, but not too much fun. Remember that you are still subject to military law and the UCMJ until your separation date.

If you get into trouble, the news will likely make its way back to your command, which could jeopardize your discharge status and hard-earned benefits.

Do You Still Earn Leave While on Terminal Leave?

Yes, you do! Because you’re still on active duty until your final separation date, you continue to accrue leave at the standard 2.5 days per month.

So, if you take 60 days of terminal leave, you earn an additional 5 days during the time you’re already away. Check with your finance office to include these earned days in your terminal leave.

Do You Get Your DD-214 Before or After Terminal Leave?

Ideally, you should receive your DD-214 before or at the start of your terminal leave. While the timing depends on your branch and administrative office, you can generally expect it during your final out-processing appointment.

Can You Take Terminal Leave and Sell Leave at the Same Time?

Yes, you can absolutely do both by using a portion of your accrued time for terminal leave and selling back the remainder, provided you haven't hit your 60-day career lifetime limit.

This is perfect if you still want extra time to get a jump on outside goals while still securing a nice payout to help with transition expenses. Just keep in mind that any days you sell are paid out at the basic pay rate without added allowances.

Can the VA Pay You While on Terminal Leave?

Your VA payments typically begin the day after your official separation date. Because you are on active duty and receiving full pay, the VA cannot pay you any disability compensation.

Can You Use SkillBridge and Terminal Leave Together?

Yes, you can use both programs during your transition, but they must be taken back-to-back and not simultaneously. Under Department of Defense regulations, your SkillBridge internship must occur first, followed by your terminal leave, which carries you to your final date of separation.

It is critical to remember that the combined total of your SkillBridge program, terminal leave, and any permissive TDY cannot go over your final 180 days of service. Because many branches now cap SkillBridge participation at 120 days for certain ranks, you should plan to use your saved terminal leave to fill the remainder of that 180-day window.

Mission Complete: Marching Into Your Next Chapter

As you hang up the uniform, don’t feel pressured to have a perfect five-year plan on day one. Transitioning is a major life shift, and terminal leave is designed to give you the breathing room you need to find your footing.

Whether you jump straight into a new career or simply reconnect with your family and decompress, the goal is to have a smooth and stable handoff to civilian life. We know you’re more than your service, and now, it’s finally time to focus on your own next chapter.