California State Employee Personal Holiday Credit: Accrual and Use

A California state employee’s personal holiday is one paid day off per fiscal year, credited on July 1 once you have completed six months of your initial probationary period. You pick the date, subject to your supervisor’s approval. It sits alongside fixed state holidays like January 1 and Thanksgiving in Government Code Section 19853, but it behaves differently from vacation and sick leave in ways that trip people up, particularly around how the hours are valued, whether you can carry it over, and what happens if you never use it.¹

Who Gets the Credit and When

Eligibility comes down to one thing: finishing six months of your initial probationary period in state service. After that, you receive the personal holiday for the current fiscal year and another credit each July 1 that follows.¹ If you have never completed a probationary period, you are not eligible unless your bargaining unit’s Memorandum of Understanding says otherwise.²

The credit reaches most of the state workforce. Full-time civil service employees, part-time employees, and permanent intermittent employees all qualify. Managers, supervisors, and confidential staff have parallel rules under their own frameworks. Unlike vacation and sick leave, which accrue monthly, the personal holiday shows up as a single lump-sum credit on July 1. There is nothing to track through the year. You either have it or you have already used it.

How the Hours Are Calculated

The personal holiday is granted as a unit, not as a set number of hours. What the unit is worth in hours depends on your time base at the moment you actually take the day, not your time base on July 1.² For a full-time employee, one unit is eight hours of paid leave. If you drop from full-time to half-time between July 1 and the date you use it, you get four hours, not eight. Eight hours is the ceiling for a single credit.

Part-time employees receive hours in proportion to their time base:²

Half-time: 4.00 hours
Three-quarter time: 6.00 hours
Four-fifths time: 6.40 hours
Seven-eighths time: 7.00 hours

Smaller fractional bases scale down from there. A quarter-time employee receives 2.00 hours; a one-tenth-time employee receives 0.80 hours.

Permanent intermittent employees follow a separate formula tied to how many hours they actually worked in the pay period when they use the holiday. Working 71 to 90.9 hours in that pay period yields 4 hours of personal holiday pay; 151 or more hours yields the full 8. Fewer than 11 hours worked in the pay period, and the personal holiday has no value at all.²

How to Request and Track It

Your department head or designee can require five working days of advance notice before you take the day.¹ Not every department enforces the notice period, but submitting your request at least a week ahead removes any question about procedure.

Your current balance appears on your pay stub. You can also check it through Cal Employee Connect, the State Controller’s self-service portal for civil service employees. Balances on the portal come from the California Leave Accounting System and lag your most recent earnings statement by about a month.³

The standard record is Form STD 634, the Absence and Additional Time Worked Report, which covers all leave types.⁴ Some departments use electronic timekeeping instead. Either way, log the date, enter the hours in the personal holiday column, get supervisor sign-off, and the personnel office enters it into payroll.

If Your Request Is Denied

A supervisor can deny a personal holiday request based on operational needs.¹ What happens next depends on whether you are represented or non-represented, because the applicable MOU controls the specifics.

For represented employees under an MOU, a denied personal holiday can be rescheduled to another date, carried over to the next fiscal year, or cashed out on an hour-by-hour basis. The available options depend on which MOU governs your bargaining unit.² For non-represented employees, the agency head or designee decides whether rescheduling, carryover, or a straight-time cashout is allowed.

Don’t Let It Sit

Carryover and cashout are remedies for a denied request. They are not a standing option you can invoke because you would rather bank the day. If you simply decline to use your personal holiday during the fiscal year and no denial is on record, you risk forfeiting it. Your MOU spells out the specific rules for your unit, and it is worth reading before you assume the credit will roll forward.

Government Code Section 19854 states explicitly that when an MOU reached under Section 3517.5 conflicts with the statute, the MOU controls.¹ Your bargaining unit’s contract can modify the notice period, carryover rules, cashout provisions, and eligibility conditions. The statute sets a floor; the MOU can expand on it. Provisions that require the expenditure of funds take effect only after the Legislature approves them in the annual Budget Act.

Leaving State Service

Personal holiday payout at separation is not settled ground. Labor Code Section 227.3 treats earned but unused vacation as wages that must be paid out, but whether personal holiday credits fall into the same category is less clear. The CalHR HR Manual does not address payout of personal holidays at separation, and Government Code Section 19854 is silent on it. Some bargaining unit MOUs include payout provisions; others do not.

If you are approaching retirement or a planned departure, the safer path is to use the personal holiday before your last day, or to confirm payout eligibility with your personnel office and check your MOU. Assuming the credit will convert to cash on your final paycheck could leave money behind.

Taxes on a Cashed-Out Personal Holiday

Taking your personal holiday as an ordinary paid day off is taxed like any other day of pay. Nothing unusual happens on the paycheck.

Cashing it out is different. The IRS classifies lump-sum leave cashouts as supplemental wages, subject to a flat 22% federal income tax withholding rate for 2026.⁵ California state income tax withholding applies on top of that, along with Social Security and Medicare taxes. Employees receiving a leave payout at separation can sometimes defer part of it into a 457(b) plan such as Savings Plus to soften the immediate tax hit; the 2026 deferral limit is $24,500.⁶ Plan rules and timing matter, so coordinate with Savings Plus before your separation date.

What the Personal Holiday Doesn’t Do

It doesn’t add to your CalPERS service credit. CalPERS has specified that leave balances such as vacation and annual leave are not reportable for service credit; unused sick leave is the one type that converts at retirement.⁷ Personal holidays do not, which is another reason to use the day rather than leave it on your balance.

It also doesn’t inflate your overtime rate. Under federal law, pay for a holiday you did not work, or a cashout in lieu of it, is not included in the regular rate used to calculate overtime, and it cannot be credited toward overtime you are owed.⁸ If you work overtime in the same pay period you cash out a personal holiday, the two are calculated independently.

1
California Legislative Information. California Code Government Code 19854 – Personal Holiday
2
California Department of Human Resources. 2110 – Personal Holidays
3
California State Controller’s Office. Cal Employee Connect
4
California Department of General Services. State Administrative Manual 8534 – Personnel Procedures – Leave Balances Record
5
Internal Revenue Service. Publication 15-T, Federal Income Tax Withholding Methods
6
Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
7
CalPERS. Circular Letter 200-033-22 – Common Issues Reporting Unused Sick Leave
8
eCFR. 29 CFR 778.219 – Pay for Forgoing Holidays and Unused Leave