Federal Pay Raises by Year: Formula, Locality, and Step Increases

Federal pay raises by year for General Schedule employees have ranged from a three-year freeze between 2011 and 2013 to a 5.2% increase in 2024, with the 2026 adjustment landing at 1%. Each year’s raise combines a base pay increase applied to the whole GS grid with a locality pay adjustment that varies by geographic area. The full history since 2004 is below.

General Schedule Pay Raises Year by Year

Each percentage is the combined average of the base pay increase and the locality pay adjustment. Every annual adjustment takes effect during the first full pay period on or after January 1.¹

2004: 4.1%
2005: 3.5%
2006: 3.1%
2007: 2.2%
2008: 3.5%
2009: 3.9%
2010: 2.0%
2011: 0.0% (pay freeze)
2012: 0.0% (pay freeze)
2013: 0.0% (pay freeze)
2014: 1.0%
2015: 1.0%
2016: 1.6%
2017: 2.1%
2018: 1.9%
2019: 1.9%
2020: 3.1%
2021: 1.0%
2022: 2.7%
2023: 4.6%
2024: 5.2%
2025: 2.0%
2026: 1.0%

Across this 23-year stretch, the average annual raise works out to about 2.2%. Excluding the three freeze years, the average sits closer to 2.7%. The 2011 through 2013 freeze came out of the aftermath of the 2008 financial crisis, and the slow recovery kept raises at 1.0% for two more years after it lifted. The 2023 and 2024 spikes reflect the opposite pressure: rapid inflation and a tight labor market that made federal pay increasingly uncompetitive with the private sector.

The 2025 and 2026 Adjustments

For 2025, President Biden authorized a 1.7% across-the-board base pay increase plus a 0.3% average locality pay adjustment, producing an overall average raise of 2.0%.² That was already a sharp pullback from 2024.

The 2026 number dropped further. On August 28, 2025, President Trump issued an alternative pay plan providing a 1% base pay increase while freezing locality pay rates at 2025 levels.³ Because locality rates stayed flat, the total average raise for most General Schedule employees in 2026 is effectively 1%. The December 2025 executive order formally set the pay schedules and confirmed the frozen locality rates.⁴ For employees whose cost of living rose faster than 1%, the 2026 adjustment amounts to a real cut in purchasing power.

How Each Year’s Raise Is Built

Every General Schedule raise has two pieces that add together into the number employees see on their pay stubs.

The Base Pay Increase

The base increase shifts the entire General Schedule grid upward by the same percentage for every grade and step. Under federal law, the increase is supposed to be calculated from the Employment Cost Index, a Bureau of Labor Statistics measure of what private-sector employers pay their workers.⁵ The statutory formula compares the ECI from September of one year to September of the next, then subtracts half a percentage point.¹ In practice, that formula rarely produces the actual raise.

The Locality Pay Adjustment

Locality pay exists because a salary that feels comfortable in rural Alabama would be poverty wages in San Francisco. Federal law requires the President’s Pay Agent and the Federal Salary Council to compare federal and private-sector pay within each geographic area and recommend adjustments to close the gap.⁶

In 2026, locality pay percentages run from 17.06% in the “Rest of U.S.” catch-all area to 46.34% in the San Jose-San Francisco-Oakland area. There are 58 defined locality pay areas. Employees stationed overseas or outside any named area default to the Rest of U.S. rate. Your actual raise in any given year is the sum of the base increase and whatever change occurs in your locality percentage. In 2026, with locality frozen, the whole raise is the 1% base increase.³

Why the Formula Rarely Sets the Actual Raise

The ECI-based formula is the default, but it almost never runs on autopilot. Under federal law, the President can set aside the formula and substitute an alternative pay plan whenever a national emergency or serious economic conditions make the calculated raise inappropriate.¹ The alternative plan must go to Congress before September 1 of the preceding year. If Congress does not pass a law overriding it during the budget process, the President’s numbers become the raise.

Presidents of both parties have used this authority routinely. The 2011 through 2013 freeze, the 5.2% raise in 2024, and the 1% raise in 2026 were all set through alternative pay plans rather than the statutory formula. The formula functions as a ceiling the President can lower, and historically has not been used to push raises higher.

The Federal Salary Council has reported that federal pay lags private-sector pay by more than 20% on average, depending on location and occupation.⁷ The 1990 law that built the current system envisioned closing that gap over time through gradually increasing locality payments, but the alternative pay plan authority has kept raises consistently lower than the formula would produce.

Step Increases and the Pay Cap

The annual raise is not the only thing moving federal pay. General Schedule employees also advance through the 10 steps within their grade, earning roughly 3% more at each step. These within-grade increases happen automatically as long as performance is acceptable and the waiting period is met:⁸

One year (52 weeks) between steps 1 through 4
Two years (104 weeks) between steps 4 through 7
Three years (156 weeks) between steps 7 through 10

Reaching step 10 from step 1 within a single grade takes about 18 years.⁹ Even in a 1% year, an employee moving from step 3 to step 4 picks up another 3% on top of the across-the-board increase.

At the other end, federal law caps how far grade, step, and locality can push a General Schedule salary. Locality-adjusted pay cannot exceed the rate for Level IV of the Executive Schedule.⁶ In 2026, that ceiling is $197,200.¹⁰ In high-cost areas like San Francisco, Washington D.C., and New York, GS-15 employees at upper steps hit that ceiling, which erases the distinction between step 7 and step 10 for anyone bumping against the cap. About 37 of the 58 locality areas have at least one grade-and-step combination that reaches $197,200.

Raises for Federal Workers Outside the General Schedule

The yearly percentages above apply to General Schedule employees. Two other groups follow different rules. Hourly federal workers under the Federal Wage System, such as maintenance staff, electricians, and machinists, have their pay tied to prevailing local wages. For fiscal year 2026, Congress capped their wage adjustments at 1%, matching the GS base increase, though individual adjustments cannot fall below what General Schedule employees in the same location received.¹¹

The roughly 8,000 members of the Senior Executive Service do not receive automatic annual raises at all. SES pay falls within a band that adjusts only when Executive Schedule rates change, and SES employees do not receive locality pay.¹⁰

1
Office of the Law Revision Counsel. 5 USC 5303 – Annual Adjustments to Pay Schedules
2
U.S. Office of Personnel Management. January 2025 Pay Adjustments
3
U.S. Office of Personnel Management. 2026 Special Rates for Certain Law Enforcement Personnel
4
The White House. Adjustments of Certain Rates of Pay
5
U.S. Bureau of Labor Statistics. Employment Cost Index
6
Office of the Law Revision Counsel. 5 USC 5304 – Locality-Based Comparability Payments
7
U.S. Office of Personnel Management. Annual Report of the Presidents Pay Agent for Locality Pay in 2026
8
Office of the Law Revision Counsel. 5 USC 5335 – Periodic Step-Increases
9
U.S. Office of Personnel Management. Within-Grade Increases
10
U.S. Office of Personnel Management. January 2026 Pay Adjustments
11
U.S. Office of Personnel Management. Fiscal Year 2026 Prevailing Rate Pay Adjustments