Manager Message: Vacation and compensatory leave cash-out for 2022

September 2, 2021 - Defence Stories

The importance of using vacation leave in the year that it is earned:

We must continue to recognize the importance of leave and its influence on mental health and work-life balance. All employees are expected to use their vacation leave within the current fiscal year, as operational requirements permit and in accordance with the applicable collective agreement. We encourage you to speak with employees who have high leave balances and develop a leave plan with them.

Read more about the guiding principles: Leave Requests and Benefits.

Managers should consult their departmental labour relations advisors if they have any concerns or questions. For answers to some frequently asked questions about vacation leave during the COVID-19 pandemic, consult the Resuming Work FAQ page. For the latest information and resources impacting all Defence Team members, check out the Defence Team COVID-19 web page.

If an employee would like to request a cash-out, they must complete Form GC-178 on the Defence Forms Catalogue. You as the manager must then approve it and submit it through the Human Resource Services and Support (HRSS).

This applies only to those collective agreements that have vacation and compensatory leave payout provisions.

When submitting the GC178 in HRSS, under Submit Pay Action, select work type Leave and Sub Type Liquidate Leave (voluntary), then attach your completed GC178 form.

Type of leave (note the appropriate code):

• Code 115 – Vacation paid
• Code 815 – Compensatory paid

Please note: As with any income received, leave cash-out payments are subject to income tax. When leave is cashed out instead of used to take planned breaks from work, it increases your taxable income for the year in which you receive the payment.  This increase in taxable income may affect other benefits provided by the Federal government, where income is a determining factor for eligibility. For questions related to income tax or government benefits, please contact Canada Revenue Agency or Revenu Québec (you are now leaving the Government of Canada website).