The two options
Every unused leave day at separation or retirement goes one of two ways:
- Terminal leave — you take the leave at the very end. You remain on active duty until your date: full basic pay, BAH, BAS, and TRICARE keep running, and you keep accruing leave at 2.5 days per month while you burn it.
- Sell-back — you're paid a lump sum for the days instead. Sold leave pays basic pay only — no BAH, no BAS — at 1/30 of monthly basic pay per day, and you may sell a maximum of 60 days over a career (DAFI 36-3003 ¶7.9.2.5 for the Air Force; AR 600-8-10 and the DoD Financial Management Regulation Vol 7A state the same career cap for the other branches).
You can also split — take some as terminal leave and sell the rest — which is where the optimization actually lives.
The per-day math is not equal
A day of terminal leave and a day of sold leave are worth different amounts, and the gap is your allowances:
| Terminal leave (per day) | Sell-back (per day) | |
|---|---|---|
| Basic pay | ✔ 1/30 of monthly | ✔ 1/30 of monthly |
| BAH | ✔ continues | ✘ none |
| BAS | ✔ continues | ✘ none |
| TRICARE / active-duty status | ✔ continues to your date | — (status ends on your unchanged date) |
| Leave keeps accruing | ✔ 2.5 days/mo | ✘ |
For most members — especially anyone drawing BAH in a mid-to-high-cost area — a terminal-leave day is worth meaningfully more than a sold day. The higher your BAH relative to basic pay, the wider the gap.
What sell-back has going for it: the money arrives as a lump sum and the calendar doesn't move. Terminal leave spends calendar; selling doesn't. If a civilian salary is waiting, the true comparison is terminal-leave day vs. sold day plus a civilian workday — which can flip the answer.
Taxes
- Sold leave is fully taxable income, paid as a lump sum — withholding on a one-time payment often differs from your regular paycheck, so don't judge the offer by the net deposit alone.
- Terminal-leave pay is taxed like any other month of military pay — and BAH/BAS remain non-taxable allowances, which quietly widens terminal leave's per-day advantage after tax.
The caps that shape the choice
- 60 days sold, per career — not per separation. Days you sold at a prior reenlistment already count against the cap (DAFI 36-3003 ¶7.9.2.5; DoD FMR Vol 7A). Check your records before assuming you can sell your full balance.
- The fiscal-year carry-over cap still applies while you plan. Leave above 60 days is forfeited at the end of the fiscal year (absent special leave accrual) — a transition plan that banks a big balance has to survive one more 30 September first.
- Enlisted SLA carve-out (Air Force): members who would lose special leave accrual over 90 days may — once — sell up to 30 days of SLA, and it still counts toward the 60-day career cap (DAFI 36-3003 ¶2.4.3.1).
SkillBridge and PTDY change the picture
SkillBridge and relocation permissive TDY are not leave — they're duty status, and your leave balance keeps accruing through them. A member who stacks SkillBridge (up to 180 days) ahead of terminal leave can walk out months before their official date while the leave balance stays intact underneath. If you're weighing "sell more days" against "take SkillBridge," you're comparing a taxed lump sum against months of full pay and allowances in a civilian internship — run both.
This is exactly what the WheelsUp terminal-leave calculator does — your actual basic pay, your BAH rate, your balance, your dates; terminal vs. sell vs. split, side by side.
How to decide
- No job waiting, high BAH: terminal leave usually wins outright — every day is full pay and allowances.
- Civilian start date locked and generous: selling some days can beat burning calendar, because each sold day frees a day of civilian salary. Compare the stacked totals, not the per-day rates.
- Big balance near the caps: a split is often optimal — sell up to what the career cap allows if the math favors it, terminal-leave the rest.
- Whatever you choose, elect it deliberately — your branch requires an election on unused leave as part of separation processing; don't let it default.
Sources
- DAFI 36-3003, Military Leave Program — ¶7.9.2.5 (60-day career sell-back cap), ¶2.4.3.1 (enlisted SLA sell-back), ¶2.4.3.2 (pointing to the FMR's payment tables)
- DoD FMR 7000.14-R Vol 7A (separation payments; basic-pay-only rule) · 37 U.S.C. §501 (leave payment authority)
- AR 600-8-10, Leaves and Passes (Army terminal/transition leave)
- AFI 36-2671 / DoDI 1322.29 SkillBridge program rules (duty status, up-to-180-days)
Spot an error? Tell us — citations are the product here.
Your leave math isn't generic. WheelsUp runs terminal vs. sell-back vs. split against your real pay, BAH, balance, and dates — alongside every other transition deadline.