Use your vacation leave to avoid mandatory leave cash-out

Use your vacation leave to avoid mandatory leave cash-out

December 22, 2025 - Defence Stories

Estimated read time - 1:15

The holidays are a great time to use your vacation leave! Taking time away from work offers many benefits and can support a healthy work-life balance.

If you have a high leave balance, now is the time to plan and use it to avoid a mandatory leave cash-out.

This year marks the last year of the temporary lifting of the moratorium 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.
Reminder that employees are expected to use their vacation leave in the year it is earned.

Please refer to your relevant collective agreements for further information on vacation and compensatory leave.

If you have a high vacation leave balance, make sure to:

• Consult your collective agreement 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

Related links:

• Vacation and Compensatory Leave Cash-Out for 2022-26

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.