Public service employees: Use your excess leave before March 31, 2026
February 23, 2026 – Defence Stories
Estimated read time – 1:21
The Treasury Board of Canada Secretariat lifted the suspension on the automatic cash-out of vacation and compensatory leave from March 31, 2022, to March 31, 2026.
This year marks the final year of the lifting of the suspension on mandatory cash-out of vacation and compensatory leave. This means that on March 31, 2026, if you have more vacation or compensatory leave than you’re allowed to carry over (as outlined in your collective agreement), the excess amounts will be paid out in full. This payment will bring your vacation balance down to the permitted amount.
If you have a high leave balance, now is the time to plan and use it to avoid a mandatory cash-out. In accordance with operational requirements, employees are expected to use vacation leave during the year it is earned.
Taking time away from work offers many benefits and can support a healthy work-life balance.
Important: For all HRMS (Peoplesoft) users, all leave must be submitted in HRMS on or before Friday, March 20 by 2100 hrs (EDT). HRMS will be completely unavailable from March 20, 2026 until April 6, 2026 due to annual Leave Year-End processing.
If you have a high vacation leave balance, make sure to:
- Consult your collective agreement and/or terms and conditions of employment to determine what cash-out provisions apply to you.
- Speak with your manager to develop a leave plan and enjoy some well-earned time off.
- Understand the possible tax implications (available only on the National Defence network) if you are subject to a mandatory cash-out.
Note: Vacation leave planned for the new fiscal year (2026-2027) is not considered in the cash-out calculation. You cannot avoid the cash-out by submitting leave that falls after March 31, 2026.
Contacts:
- If you have questions about your leave balance or scheduling leave, speak to your manager.
- For information on tax implications, contact the Canada Revenue Agency or Revenu Québec.
- For general questions about cash-out, contact HR Connect RH or call 1-833-747-6363.