The 2026 General Schedule (GS) pay tables include a 1% across-the-board base pay increase, with locality pay rates held at 2025 levels. Below you’ll find the full 2026 base pay table and the latest on where things stand for the 2027 federal pay raise.

2026 GS Pay Raise At a Glance

• Base pay increase: 1.0% across the board
• Locality pay: frozen at 2025 rates
• Pay range: $22,584 (GS-1, Step 1) to $164,301 (GS-15, Step 10) in base pay, before locality
• Pay cap: total salary (base + locality) cannot exceed the Executive Schedule Level IV cap of $197,200

2026 GS Base Pay Table

This is the nationwide base table before locality pay is added.  Get the complete OPM 2026 GS Pay Tables here

Source: U.S. Office of Personnel Management, 2026 General Schedule.

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2027 GS Pay Raise Watch

Status: Not yet finalized. Two very different outcomes are on the table for 2027, and the decision will land later this year.

• The FAIR Act proposal: Legislation introduced in Congress (the Federal Adjustment of Income Rates Act) calls for an average 4.1% raise in 2027 — a 3.1% across-the-board increase plus an average 1.0% locality pay adjustment. It has union backing but has not passed.
• The administration’s budget: The White House’s FY2027 budget request did not include a civilian federal pay raise, and OMB has indicated the plan envisions a pay freeze for civilian employees next year — while proposing a 5-7% raise for military personnel.
• What happens next: By law, the President must submit an alternative pay plan by the end of August. From there, congressional appropriations and a final executive order — typically issued in December — will determine the actual 2027 GS pay tables. A full freeze would be the first since 2013.

Want to know the moment the 2027 Federal Pay Raise is determined?

Enter your email  on this form [CLICK HERE] and we’ll send you an email alert as soon as the 2027 pay raise (or freeze) is finalized — plus what it means for your specific grade and step.

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The Ultimate Guide to the GS Pay Scale

Everything Federal Employees Need to Know About Grades, Steps, Promotions, Locality Pay, and How Your Salary Affects Retirement

The General Schedule (GS) pay system is the backbone of compensation for most white-collar federal employees. Whether you’re just entering federal service or you’re within a few years of retirement, understanding how the GS system works can help you make better career decisions and maximize your lifetime earnings.

Your GS grade and step influence much more than your paycheck. They affect:

• Your annual salary
• Future pay raises
• Promotion opportunities
• Thrift Savings Plan (TSP) contributions
• Agency matching contributions
• Your High-3 average salary
• Your future FERS pension

Many employees understand only part of the system. They know they’re a GS-11 Step 5 or GS-13 Step 2, but they don’t fully understand why they receive certain raises, how promotions are calculated, or how locality pay fits into the picture.   This guide explains the entire General Schedule in plain English using official information from the U.S. Office of Personnel Management (OPM). Along the way, we’ll also discuss how salary decisions made during your career can affect your retirement.  Throughout this guide, you’ll also find links to in-depth companion articles that explore each topic in greater detail.

In This Guide

• What Is the GS Pay Scale?
• History of the General Schedule
• How GS Grades Work
• How GS Steps Work
• Within-Grade Increases
• Career Ladder Promotions
• The Two-Step Promotion Rule
• Locality Pay Explained
• Annual Federal Pay Raises
• Special Salary Rates
• How GS Pay Affects Your Retirement
• Frequently Asked Questions

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What Is the General Schedule (GS) Pay Scale?

The General Schedule (GS) is the primary pay system for approximately 1.5 million white-collar civilian employees across the federal government. It provides a standardized framework for determining pay based on the duties of a position, the qualifications required, and the employee’s level of experience.

The General Schedule covers professional, administrative, technical, and clerical occupations in most executive branch agencies. It does not cover every federal employee. Some agencies use separate pay systems, such as the Federal Wage System (FWS), pay band systems, or agency-specific compensation structures.

Under the GS system, every covered position is assigned:

• A grade (GS-1 through GS-15), which reflects the level of responsibility and complexity of the work.
• A step (Step 1 through Step 10), which generally reflects longevity and acceptable performance within that grade.

Most employees also receive a locality pay adjustment, which increases their salary based on labor market conditions where they work.

The combination of these three components—grade, step, and locality pay—determines an employee’s annual salary.

General Schedule Overview:
https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/

Example

Imagine two employees performing similar work:

Employee	Grade	Step	Duty Station
Sarah	GS-11	Step 4	Denver
Michael	GS-11	Step 4	Washington, DC

Although both employees have the same grade and step, their total salaries differ because each duty station has a different locality pay percentage.  Understanding this distinction becomes increasingly important when comparing job offers or planning for retirement.

Why the GS Pay Scale Exists

Prior to the establishment of a government-wide classification system, pay practices varied considerably among federal agencies. Similar jobs could receive different salaries simply because they were located in different organizations.

The General Schedule was designed to bring greater consistency and fairness by establishing common salary structures across the federal workforce.  Today, OPM administers the General Schedule, publishes annual salary tables, establishes policies governing promotions and within-grade increases, and oversees locality pay implementation.  Although agencies classify individual positions, OPM establishes the overarching framework used government-wide.

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How GS Grades Work

One of the biggest misconceptions about the General Schedule is that your GS grade reflects how long you’ve worked for the government.  It doesn’t.  A GS grade reflects the difficulty, responsibility, qualifications, and complexity of the position—not the employee.

For example:

• A newly hired attorney may begin as a GS-11 or GS-12.
• An experienced administrative professional may remain a GS-9 for many years.
• A scientist with a Ph.D. may enter federal service at a higher grade than someone with decades of unrelated experience.

The position determines the grade. The employee must qualify for the position.  Understanding this distinction makes it much easier to understand promotions, career ladders, and future salary growth.

https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/general-schedule/

Classification & Qualifications

https://www.opm.gov/policy-data-oversight/classification-qualifications/

What Does a GS Grade Represent?

Every General Schedule position is classified into one of 15 grades.

As grades increase, so do:

• Complexity of the work
• Knowledge required
• Level of independent judgment
• Scope of responsibility
• Supervisory expectations
• Salary

Think of your grade as the government’s way of measuring the value and responsibility of the position, not the worth of the employee.  An employee can receive multiple step increases without changing grades.  Likewise, an employee may receive a promotion to a higher grade even if they are only Step 1 in their current grade.  Those are two entirely different forms of salary growth.

The 15 GS Grades

The General Schedule includes fifteen grades.

Grade	Typical Level
GS-1	Entry support positions
GS-2	Entry support positions
GS-3	Clerical/support
GS-4	Experienced clerical/technical
GS-5	Entry professional positions
GS-6	Technical support
GS-7	Developmental professional
GS-8	Technical specialist
GS-9	Experienced professional
GS-10	Senior technical positions
GS-11	Journey-level professional
GS-12	Senior specialist
GS-13	Technical expert/team leader
GS-14	Senior manager/program manager
GS-15	Executive-level manager below SES

Actual duties vary by occupation and agency, but responsibility generally increases as grades rise.

Typical Education Levels

Although education alone never guarantees a GS grade, OPM qualification standards commonly associate certain education levels with entry into federal service.

Education	Typical Entry Grade*
High school diploma	GS-2
Associate degree	GS-4
Bachelor’s degree	GS-5
Bachelor’s with Superior Academic Achievement	GS-7
Master’s degree	GS-9
Doctoral degree	GS-11

*Actual qualifications depend on the occupational series and vacancy announcement.

Many positions substitute specialized experience for education.  For example, an experienced private-sector cybersecurity professional could qualify for a GS-12 position without an advanced degree.

Qualification Policies

https://www.opm.gov/policy-data-oversight/classification-qualifications/

Career Ladder Positions

One of the best features of federal employment is the career ladder.

Many vacancy announcements look like this:

GS-7/9/11/12

This does not mean four separate jobs.

It means the position has built-in promotion potential.

Assuming satisfactory performance and available work, an employee may be promoted without competing for a new position until reaching the full performance level.

Example

Jennifer accepts a position advertised as:

Management Analyst

GS-7/9/11/12

Her career could look like this:

Year	Grade
Hire	GS-7
Year 2	GS-9
Year 3	GS-11
Year 4	GS-12

After reaching GS-12, she has reached the full performance level.  Future salary increases typically come through:

• Within-grade increases
• Competitive promotions
• Agency transfers
• Higher-level supervisory positions

Career ladder promotions are among the fastest ways to increase lifetime federal earnings during the early years of a career.

Grades vs. Steps

Many employees confuse these two concepts.

Grade

Represents:

• Position level
• Responsibility
• Complexity
• Qualifications

Usually changes through promotion.

Step

Represents:

• Longevity
• Acceptable performance
• Time in grade

Usually changes automatically after required waiting periods.

Think of it this way:

Promotion = Bigger Job

Step Increase = More Experience

Later in this guide we’ll examine step increases in detail.

Example Career Progression

Let’s compare two employees.

Employee A

Starts: GS-9 Step 1

Ten years later: GS-9 Step 7

Same position.  Higher salary through step increases.

Employee B

Starts: GS-9 Step 1

Promoted: GS-11

Later promoted: GS-12

Later promoted:  GS-13

Although both employees performed well, Employee B experienced substantially greater salary growth because promotions increase pay much faster than step increases.  Understanding this distinction is essential when planning both your career and retirement.

Why GS Pay Grades Matter for Retirement

Most federal employees think about grades only when they receive a promotion.  But grades can have a lasting impact on retirement.

Higher grades generally mean:

• Larger annual salaries
• Larger TSP contributions
• Larger agency matching contributions
• Higher High-3 average salary
• Larger FERS pension

Consider two employees retiring with identical years of service.

Employee A retires as a GS-12.  Employee B retires as a GS-13.  Even if both worked the same number of years, the employee retiring at GS-13 will generally have a higher High-3 average salary, resulting in a larger lifetime pension.  That’s one reason many federal employees pursue promotions during the final years of their careers.

In a later part of this guide, we’ll explore when accepting—or delaying—a promotion may make sense from a retirement planning perspective.

Common Misconceptions on GS Pay Grades

“Everyone eventually reaches GS-15.”

False.  Many federal careers top out at GS-11, GS-12, or GS-13 depending on the occupation and agency.

“More years automatically increase my grade.”

False.  Years of service may increase eligibility for promotion, but promotions are not automatic.

“My grade depends only on education.”

False. OPM qualification standards consider education, specialized experience, and the requirements of the position.

“Changing agencies always means starting over.”

Not necessarily.  Employees often transfer between agencies at the same grade—or even receive promotions when changing agencies.

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How GS Pay Steps Work

If your GS grade determines the level of your position, your GS step determines where you are within that grade.  Every General Schedule grade contains 10 steps, numbered Step 1 through Step 10. As you progress through the steps, your salary increases while your job classification remains the same.  Unlike a promotion, a step increase does not require you to move into a higher-level position. Instead, it recognizes continued service and acceptable job performance.  For many federal employees, step increases account for a significant portion of salary growth throughout their careers.

Within-Grade Increases Fact Sheet

https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/within-grade-increases/

What Is a GS Step?

Each GS grade contains ten salary levels.  For example:

• GS-11 Step 1
• GS-11 Step 2
• GS-11 Step 3
• …
• GS-11 Step 10

Although all of these employees hold positions classified at the GS-11 level, their salaries differ because of their step.  Generally speaking, each step increase provides an increase of about 3 percent over the previous step.  The exact dollar amount varies by grade and by locality pay area because salary tables are updated annually.

Think of It This Way

Grade = Your Job

Step = Your Experience Within That Job

A promotion changes your grade.  A Within-Grade Increase changes your step.  They are two completely different types of pay increases.

How Do You Earn a Step Increase?

Step increases are officially called Within-Grade Increases (WGIs).

According to OPM, employees generally must meet four requirements:

• Occupy a permanent General Schedule position.
• Complete the required waiting period.
• Perform at an acceptable level of competence.
• Not receive an equivalent increase during the waiting period.

If these requirements are met, agencies generally process the increase automatically.  Federal employees do not normally submit an application for a Within-Grade Increase.

Waiting Periods Between Steps

One of the unique features of the General Schedule is that waiting periods become longer as employees move through their careers.

Step Increase	Waiting Period
Step 1 → 2	52 weeks
Step 2 → 3	52 weeks
Step 3 → 4	52 weeks
Step 4 → 5	104 weeks
Step 5 → 6	104 weeks
Step 6 → 7	104 weeks
Step 7 → 8	156 weeks
Step 8 → 9	156 weeks
Step 9 → 10	156 weeks

This means that salary growth is fastest during the early years within a grade and gradually slows over time.  For an employee who remains in the same grade, it typically takes about 18 years to progress from Step 1 to Step 10.

Practical Example

Imagine Maria begins federal service as a GS-9 Step 1.  Her career within that grade could look like this:

Year	Step
Hire	Step 1
Year 1	Step 2
Year 2	Step 3
Year 3	Step 4
Year 5	Step 5
Year 7	Step 6
Year 9	Step 7
Year 12	Step 8
Year 15	Step 9
Year 18	Step 10

If Maria receives promotions during this period, her step progression would be recalculated under OPM’s promotion rules rather than simply continuing to the next step.

Can You Lose a Step Increase?

Most employees receive their Within-Grade Increase on schedule.  However, a step increase is not automatic regardless of performance.  OPM requires an employee to perform at an acceptable level of competence to receive a WGI.  If management determines an employee’s performance does not meet the required standard, the increase may be delayed or denied under OPM procedures.  Employees are generally entitled to notice and review rights when a Within-Grade Increase is withheld.  Fortunately, most federal employees who maintain satisfactory performance receive their WGIs as scheduled.

Equivalent Increases

Another concept that sometimes confuses employees is the equivalent increase. Certain personnel actions—such as some promotions or pay adjustments—may count as an equivalent increase under OPM regulations.  When this occurs, the waiting period for the next Within-Grade Increase may begin again from the effective date of that action.  Because equivalent increase rules can become technical, employees experiencing promotions or other pay actions should consult their agency’s Human Resources office if they have questions about their next WGI eligibility date.

Step Increases vs. Promotions

These terms are often used interchangeably, but they are very different.

Step Increase	Promotion
Same grade	Higher grade
Rewards longevity and performance	Rewards increased responsibility
Occurs after waiting periods	Requires selection or career ladder advancement
Usually about a 3% increase	Often substantially larger increase
Governed by WGI rules	Governed by OPM promotion rules

Understanding this distinction helps explain why some employees remain in the same grade for many years while steadily increasing their salaries.

How Steps Affect Your Retirement

Many employees focus only on promotions, but steps also play an important role in retirement planning.  Because your High-3 average salary is based on your highest three consecutive years of basic pay, progressing through the higher steps of your grade can increase both:

Your High-3 average salary

Your lifetime FERS annuity

Example

Consider two employees who both retire after 30 years of federal service as GS-13 employees.

Employee A retires as GS-13 Step 4.

Employee B retires as GS-13 Step 10.

Although they hold the same grade, Employee B’s higher step generally results in a higher High-3 average salary and, therefore, a larger FERS pension.  This illustrates why remaining employed long enough to receive additional step increases can have lasting retirement benefits.  Of course, retirement decisions involve many factors beyond salary, including health, personal goals, and financial readiness. Still, understanding how steps influence your High-3 can help you evaluate the potential long-term value of delaying retirement.

Common Questions on GS Steps

Does every federal employee receive step increases?

No. Step increases apply primarily to employees covered by the General Schedule. Employees in other federal pay systems may be subject to different compensation rules.

Can I skip steps?

Generally, no. Within-Grade Increases progress sequentially from one step to the next. Promotions are handled under separate rules.

Does locality pay increase with each step?

Yes. Because locality pay is calculated using your basic pay, a higher step typically results in a higher locality-adjusted salary as well.

Is Step 10 the maximum salary?

Step 10 is the highest step within a given GS grade. Employees who want higher salaries generally must receive a promotion to a higher grade or move into another pay system if eligible.

Career Ladder Promotions, Competitive Promotions, and the Two-Step Promotion Rule

For many federal employees, the largest salary increases during their careers don’t come from annual pay raises or within-grade increases—they come from promotions. Understanding how promotions work can help you make better career decisions, evaluate job opportunities, and estimate how future salary increases may affect your retirement.  Not all promotions are the same. Some occur automatically through a career ladder, while others require you to compete for a new position. Regardless of how you receive the promotion, OPM has established rules for determining your new salary.  One of the most important of these is the Two-Step Promotion Rule.

Promotion Fact Sheet: https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/promotions/

What Is a Promotion?

A promotion occurs when an employee moves to a position classified at a higher GS grade.  Unlike a Within-Grade Increase, which rewards continued service within the same position, a promotion reflects increased responsibility, more complex duties, or advancement into a higher-level position.

Examples include:

• GS-7 to GS-9
• GS-9 to GS-11
• GS-11 to GS-12
• GS-12 to GS-13

Promotions generally result in a larger salary increase than a step increase because they move an employee into a higher pay grade.

Career Ladder Promotions

Many federal employees begin their careers in positions with built-in promotion potential.  Note: OPM has proposed eliminating the standard one-year time-in-grade requirement for promotions. If finalized, career ladder promotions could happen faster than described below. See our full breakdown of the proposed rule and what it could mean for your retirement timeline.

A vacancy announcement might read:

GS-7/9/11/12

This indicates a career ladder position.  Assuming satisfactory performance, successful completion of training, and agency approval, the employee may be promoted without competing for another vacancy until reaching the full performance level.

Example

James accepts a Budget Analyst position advertised as:

GS-7/9/11/12

His progression could look like this:

Year	Grade
Hire	GS-7
Year 2	GS-9
Year 3	GS-11
Year 4	GS-12

Once James reaches GS-12, he has reached the full performance level for that position.  Future promotions would generally require competing for higher-level vacancies.

Important Note

Career ladder promotions are not automatic.  Employees must continue to perform successfully, meet qualification requirements, and management must determine that promotion is appropriate.

Competitive Promotions

Once employees reach the highest grade in their career ladder, additional advancement usually requires applying for a higher-grade position.  This is known as a competitive promotion.  Examples include:

• GS-12 Program Analyst applying for a GS-13 position
• GS-13 Supervisor applying for a GS-14 management position
• GS-14 Division Chief applying for a GS-15 Executive position

Competitive promotions generally involve:

• Vacancy announcements
• Qualification review
• Interviews
• Selection by the hiring official

The Two-Step Promotion Rule

One of the most misunderstood parts of the General Schedule is how a promoted employee’s new salary is calculated.  Federal agencies generally follow OPM’s Two-Step Promotion Rule.  Rather than simply moving an employee to Step 1 of the higher grade, agencies calculate a salary that provides a meaningful increase over the employee’s current pay.  In simplified terms, agencies:

1. Determine the employee’s current GS grade and step.
2. Identify the salary equal to two step increases in the current grade.
3. Compare that amount to the salary table for the higher grade.
4. Place the employee at the lowest step in the higher grade that equals or exceeds that amount.

This process helps ensure employees receive an appropriate salary increase when promoted.  Because salary tables differ by locality pay area, the exact step assigned after promotion can vary.

Practical Example

Imagine Karen is currently: GS-11 Step 5.  She is promoted to:  GS-12′

Her agency first determines what her salary would be after adding the value of two steps within GS-11.  The agency then reviews the GS-12 salary table and places Karen at the first GS-12 step that is equal to or greater than that calculated amount.  Depending on the salary table, Karen might enter the new grade at Step 2, Step 3, or another appropriate step.  The calculation is based on official OPM pay tables—not estimates or percentages.

Promotions vs. Annual Pay Raises

It’s helpful to distinguish three different types of salary increases.

Type	Why It Happens
Annual Pay Raise	Government-wide adjustment to pay tables
Within-Grade Increase	Time and acceptable performance
Promotion	Advancement to a higher-grade position

Many employees receive all three during the same career.  For example:

• Government-wide annual pay adjustment
• Within-Grade Increase
• Promotion to a higher grade

Each affects salary differently.

Highest Previous Rate

Some employees changing agencies or returning to federal service may hear the term Highest Previous Rate (HPR).  OPM allows agencies, under certain circumstances, to set pay based on an employee’s highest previous federal rate of basic pay.  However, use of HPR is generally discretionary and depends on agency policy.  Employees considering a transfer or reemployment should consult their Human Resources office regarding how HPR might apply in their situation.

Common Questions on Promotions

Do promotions always mean more money?

Yes. Under OPM promotion rules, employees generally receive an increase in pay when promoted.

Can I refuse a promotion?

Yes. Employees may decline promotional opportunities.

Do career ladder promotions require applying for another job?

Generally, no. Career ladder promotions occur within the same position when the employee meets applicable requirements and management approves the advancement.

Is every promotion calculated the same way?

Most General Schedule promotions follow OPM’s Two-Step Promotion Rule, although certain situations may involve additional pay-setting authorities.

Base Pay vs. Locality Pay

Understanding How Federal Employees Are Paid Across the United States

One of the first things many new federal employees notice is that there isn’t just one General Schedule salary table.  Instead, there are dozens.  That’s because most employees covered by the General Schedule receive locality pay in addition to their GS base salary. While two employees may have the same GS grade and step, they can earn different salaries depending on where they work.

Understanding locality pay is important when:

• Comparing federal job offers
• Transferring between agencies
• Moving to another part of the country
• Planning for retirement
• Estimating your High-3 average salary

Although locality pay may seem complicated at first, the concept is actually straightforward once you understand how the federal government calculates salaries.

Salary Tables

https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/

What Is Base Pay?

Every General Schedule employee begins with the same nationwide base pay table.  The base table contains salary amounts for:

GS-1 through GS-15

Step 1 through Step 10

This base schedule applies equally across the country before any geographic adjustment is added.  Think of the base table as the foundation of the federal pay system.  No matter where you work, every GS employee starts with the same base pay for a given grade and step.

What Is Locality Pay?

Locality pay is an additional percentage added to your base salary.  Its purpose is to make federal salaries more competitive with non-federal wages in different labor markets.  Because salaries in cities such as Washington, DC, San Francisco, or Seattle are generally higher than salaries in many other parts of the country, locality adjustments vary across geographic areas.

Why Does Locality Pay Exist?

Congress authorized locality pay so federal agencies could better compete for qualified employees in different labor markets.  Without locality adjustments, recruiting employees in high-cost, high-wage metropolitan areas would be significantly more difficult.  Each year, OPM publishes salary tables for every approved locality pay area.  Although locality percentages change periodically, the goal remains the same:  To improve pay comparability between federal and non-federal employers in different geographic regions.

Who Receives Locality Pay?

Most civilian General Schedule employees receive locality pay.  However, there are exceptions.  Certain federal employees work under:

• Special salary rate schedules
• Agency-specific pay systems
• Pay band systems
• Overseas compensation systems

Those employees may be compensated under different rules.  For employees covered by the General Schedule, locality pay is normally incorporated directly into the published salary tables.

What Is the “Rest of U.S.” Locality?

Not every federal employee works in a separately designated locality pay area.  Employees whose official duty station is outside one of the named locality areas generally receive the Rest of U.S. (RUS) locality rate.  Although it is often called “Rest of U.S.,” it is still a locality adjustment.  Employees do not receive only base pay.

Many new federal employees mistakenly believe they receive no locality adjustment because they are outside a major metropolitan area.  In reality, most employees receive either:

• A named locality rate, or
• The Rest of U.S. locality rate.

Example: Same Grade, Different Salaries

Consider three employees.

All are:

• GS-12
• Step 5

However, their official duty stations differ.

Employee	Duty Station
Michelle	Washington, DC
Brian	Denver
Lisa	Rest of U.S.

Because each locality has a different adjustment percentage, each employee earns a different annual salary—even though all three hold identical GS grades and steps.  This illustrates why federal employees should compare official salary tables, not simply grades and steps, when evaluating job opportunities.

Can Locality Pay Change?

Yes.  Locality pay percentages are reviewed periodically.  Each year OPM publishes updated salary tables that reflect:

• Government-wide annual pay adjustments
• Updated locality percentages
• Newly established locality areas, when authorized

Employees should review the latest official salary tables rather than relying on previous years’ salaries.

Does Locality Pay Affect Retirement?

This is one of the most common questions federal employees ask.  For most General Schedule employees, locality-adjusted basic pay is included when calculating the High-3 average salary used for FERS retirement.  This means locality pay can directly influence:

• High-3 average salary
• FERS basic annuity

Example

Imagine two employees retire after identical careers.  Both have:

• 30 years of service
• GS-13 Step 7
• Same retirement date

One employee spent the final years of service in a higher-paying locality area.  The other spent those years in the Rest of U.S. locality.  Because their locality-adjusted rates of basic pay differ, their High-3 average salaries may also differ. That difference can affect lifetime retirement income.  It’s one reason employees considering transfers shortly before retirement should understand how locality-adjusted basic pay fits into the FERS pension calculation.

Should You Move Before Retirement?

Some employees wonder whether relocating to a higher locality area shortly before retirement could increase their pension.  The answer depends on many factors, including:

• Your official duty station
• Timing of the move
• Length of time at the higher salary
• Whether the higher locality-adjusted salary becomes part of your High-3 average

A higher locality rate alone does not automatically increase your retirement benefit unless it affects your highest three consecutive years of basic pay.  Employees considering relocation near retirement should carefully evaluate the long-term financial impact rather than focusing only on the immediate salary increase.

Common Misconceptions on Locality Pay

“Locality pay is the same as a cost-of-living adjustment.”

False.  Locality pay is intended to improve pay comparability between federal and non-federal employers in different labor markets.  It is not based solely on the local cost of living.

“Only employees in large cities receive locality pay.”

False.  Most General Schedule employees receive either a named locality adjustment or the Rest of U.S. locality adjustment.

“Changing locality areas always increases my salary.”

Not necessarily.  Some locality areas have higher adjustments than others.  Moving between geographic areas may increase—or decrease—your total salary.

“Locality pay doesn’t count toward retirement.”

For most General Schedule employees covered by FERS, locality-adjusted basic pay is generally included in the High-3 average salary used to calculate the FERS basic annuity.

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Annual GS Pay Raises, Special GS Salary Rates, and Other Federal Pay Adjustments

Most federal employees expect to receive a salary increase each year, but not all pay increases are the same.  Your annual earnings may increase because of:

• Government-wide annual pay raises
• Locality pay adjustments
• Within-Grade Increases (WGIs)
• Promotions
• Special Salary Rates (SSRs)
• Recruitment, relocation, or retention incentives (for eligible employees)

Understanding the difference between these pay adjustments can help you better estimate your future earnings and avoid confusion when reviewing annual salary tables.

Salary Tables

https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/

Special Rates

https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/special-rates/

Pay & Leave

https://www.opm.gov/policy-data-oversight/pay-leave/

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Annual Government-Wide Federal Employee Pay Raises

Most years, General Schedule employees receive a government-wide pay adjustment that becomes effective in January.  These annual adjustments generally include:

• An increase to the nationwide GS base pay schedule.
• Updated locality pay percentages for applicable geographic areas.

The exact percentage varies from year to year.  OPM publishes updated salary tables after the annual adjustment is authorized.  Because every employee’s salary begins with the official pay tables, annual adjustments affect virtually every General Schedule employee.

Example

Suppose you are a GS-12 Step 5.  When a new year’s salary tables take effect, your salary generally increases automatically based on the updated pay tables.  This adjustment is separate from:

• Step increases
• Promotions
• Performance awards

Employees often receive multiple types of pay increases during the same year.

How Annual Pay Raises Are Different from Step Increases

Many employees mistakenly believe their annual pay raise is the same as a Within-Grade Increase.  They’re actually different.

Annual Pay Raise	Within-Grade Increase
Applies to updated pay tables	Applies to individual employee
Usually occurs each January	Occurs after required waiting periods
Affects nearly all GS employees	Based on time and acceptable performance
Government-wide adjustment	Individual salary progression

An employee may receive both in the same year.

For a deeper look at how these pay types interact — including why federal pay raises and retiree COLAs often don’t move together — see our full guide to pay raises vs. COLAs.

Special Salary Rates (SSR)

Some occupations experience unusually difficult recruitment or retention challenges.  To help agencies attract and retain qualified employees, OPM authorizes Special Salary Rates (SSRs) for certain occupations and geographic locations.  Special Salary Rates establish higher rates of basic pay than the regular General Schedule for eligible employees.  Examples of occupations that may receive Special Salary Rates include certain:

• Information technology positions
• Cybersecurity occupations
• Engineering positions
• Healthcare occupations
• Scientific positions

Eligibility depends on the official position and applicable OPM Special Rate Table.

Not every employee in these occupations automatically receives a Special Salary Rate.

Why Do Special Salary Rates Exist?

Federal agencies often compete with private-sector employers for highly skilled professionals.  In some fields, standard General Schedule salaries may not be competitive enough to recruit or retain qualified employees.  Special Salary Rates allow agencies to offer higher rates of basic pay where authorized.  These rates are established by OPM and published in official Special Rate Tables.

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Recruitment, Relocation, and Retention Incentives

In addition to salary rates, agencies may use certain incentives to address staffing needs.  These may include:

Recruitment Incentives

Paid to newly appointed employees when agencies experience difficulty filling positions.

Relocation Incentives

Provided to encourage current employees to relocate to positions in different geographic areas.

Retention Incentives

Used to encourage highly qualified employees to remain in positions that would otherwise be difficult to fill.  Unlike General Schedule salary, these incentives are generally discretionary and subject to agency approval.  Not every employee qualifies.

Pay Limitations

Although the General Schedule includes fifteen grades and ten steps, federal salaries are also subject to statutory pay limitations.

Certain high-level employees may reach:

• Maximum payable rates
• Executive Schedule pay limitations
• Aggregate compensation limits

Most General Schedule employees never encounter these limits during their careers.  However, employees at higher grades in high-paying locality areas may eventually approach applicable salary caps.

Performance Awards

It’s important to distinguish performance awards from salary.

Many agencies recognize outstanding performance through:

• Cash awards
• Time-off awards
• Quality Step Increases (QSIs), where authorized

Most awards are not permanent increases in basic pay.  Instead, they provide one-time recognition for exceptional performance.  One notable exception is the Quality Step Increase (QSI).  A QSI advances an employee one additional step within the current grade based on sustained high-quality performance, allowing the employee to reach the next step sooner than through the normal waiting period.  Because QSIs increase an employee’s rate of basic pay, they may also affect future retirement calculations.

How GS Pay Adjustments Affect Retirement

One of the biggest retirement planning mistakes is assuming every increase in compensation raises your future pension.  That’s not always the case.

Usually Included in Basic Pay

• Annual GS pay adjustments
• Within-Grade Increases
• Promotions
• Locality-adjusted basic pay
• Special Salary Rates (when applicable)

Generally Not Included as Basic Pay

• Performance bonuses
• Cash awards
• Recruitment incentives
• Relocation incentives
• Retention incentives

Because your FERS basic annuity is based on your High-3 average salary, understanding which forms of compensation are considered basic pay can help you better estimate your future retirement income.  Employees nearing retirement should pay particular attention to salary increases that permanently raise their rate of basic pay rather than temporary payments that do not.

Practical Example

Imagine two GS-13 employees.  Employee A receives: $5,000 performance award

Employee B

Receives promotion to GS-14

Although Employee A receives more cash immediately, Employee B’s higher rate of basic pay may increase:

• Future annual earnings
• TSP contributions
• Agency matching contributions
• High-3 average salary
• Lifetime FERS pension

This example illustrates why permanent salary increases often have greater long-term financial value than one-time bonuses.

Common Questions on GS Pay Raises

Does everyone receive the annual federal pay raise?

Most General Schedule employees receive the annual adjustment reflected in the updated salary tables.

Is a Special Salary Rate the same as locality pay?

No.  Special Salary Rates and locality pay are separate pay-setting authorities.

Do bonuses increase my High-3 salary?

Generally, no.  One-time cash awards and bonuses are generally not included in basic pay used to calculate the FERS basic annuity.

Can I receive both locality pay and a Special Salary Rate?

Certain Special Salary Rate positions may also receive locality adjustments, depending on the applicable OPM pay tables and governing rules.  Employees should consult the official Special Rate Table applicable to their position.

Key Takeaways

Understanding the General Schedule isn’t simply about knowing your next paycheck.

It helps you understand:

• How your salary grows throughout your career.
• Why promotions often matter more than annual raises.
• How Within-Grade Increases affect long-term earnings.
• Why locality pay is important.
• How salary influences your High-3 average.
• How compensation affects TSP savings.
• Why career decisions made years before retirement can affect lifetime retirement income.

The earlier you understand these relationships, the more opportunities you have to make informed decisions that support your long-term financial goals.

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How Your GS Salary Affects Your Retirement

Your grade, step, and locality don’t just determine your paycheck — they flow directly into your FERS High-3 average salary and, from there, your pension. A few of the biggest levers:

• Promotions and steps generally increase your rate of basic pay more than one-time bonuses or awards, which don’t count toward your High-3 at all. See how the High-3 average is calculated and what does (and doesn’t) count.
• Locality pay is included in your High-3 calculation, so a transfer between locality areas can affect your pension — timing matters.
• Earlier promotions under OPM’s proposed time-in-grade changes could mean more years at a higher grade before retirement. Here’s what that proposal could mean for your retirement timeline.

Frequently Asked Questions

Does a higher GS grade always increase my pension?

Generally, a higher GS grade results in a higher rate of basic pay. If that higher salary becomes part of your High-3 average salary, it can increase your FERS basic annuity.

Should I delay retirement for one more step increase?

It depends. A higher step may increase your High-3 average salary, but retirement timing should also consider personal, financial, and lifestyle factors.

Do bonuses increase my High-3?

Generally, no. OPM distinguishes basic pay from bonuses, awards, overtime, and many other forms of compensation.

Does locality pay count?

For most General Schedule employees, locality-adjusted basic pay is included in the High-3 calculation.