2026 Federal Pay Raise: GS Scale Changes and Locality Pay Explained

Each January, federal employees await news of the annual pay raise. In 2026, federal employees received a pay increase, though the amount varies by grade level and geographic location. Understanding how the General Schedule (GS) pay scale works, how your locality pay affects your salary, and what this raise means for your career is important for federal workforce planning. This guide breaks down the 2026 federal pay raise, explains the GS pay structure, and shows you how to calculate your new salary.

Overview of the 2026 Federal Pay Raise

The 2026 federal pay raise is structured in two components: a government-wide pay raise and locality pay adjustments that vary by geographic location. The government-wide raise applies to all federal employees on the General Schedule, while locality adjustments account for cost-of-living differences across the country.

This 2.6% across-the-board raise represents a modest increase that keeps pace with inflation but doesn't significantly boost purchasing power. For a GS-7 employee earning approximately $39,000 annually, this translates to roughly $1,000 in additional annual income before taxes. For a GS-13 at $87,000, the raise amounts to approximately $2,260 per year.

How the General Schedule (GS) Pay System Works

The General Schedule is the primary pay structure for federal civilian employees. Understanding how GS grades and steps work is critical for salary planning and career progression.

GS Grades and Steps

Every GS position has a grade (1-15) and a step (1-10) that determine your base salary. The grade reflects the complexity, responsibility, and skill requirements of your position. Entry-level administrative positions might be GS-3 or GS-4, while supervisory and professional roles often range from GS-11 to GS-15.

Within each grade, there are 10 steps. You start at step 1 when hired at a new grade, and you progress to step 2 after 1 year, step 3 after 2 years, and so on. The increase between steps is roughly 3% of your salary per step. This means a GS-9 step 1 employee earns approximately 3% less than a GS-9 step 2 employee at the same grade.

2026 GS Pay Table Example

The GS pay table is published annually by the Office of Personnel Management (OPM). Below is a simplified example of base salaries for selected grades in 2026 (non-locality adjusted):

Note: These are base salary figures for the "Rest of United States" locality area. Actual salaries in your region will be higher due to locality pay adjustments.

Understanding Locality Pay Adjustments

Locality pay is one of the most important components of federal employee compensation. The federal government recognizes that the cost of living varies dramatically across the country. A GS-11 salary in rural Mississippi goes much further than the same nominal salary in San Francisco or New York City. To compensate, the government adjusts pay based on geographic location.

What is Locality Pay?

Locality pay is an additional percentage added to your base GS salary based on your duty location. The Office of Personnel Management publishes a list of 32 locality pay areas (metropolitan areas and regions) across the United States. Each locality pay area has a locality adjustment expressed as a percentage.

2026 Locality Pay Adjustments by Region

Locality pay adjustments vary widely. Here are representative 2026 adjustments for major localities:

As you can see, locality pay significantly impacts your actual salary. A GS-11 step 5 employee in the Bay Area earns roughly $20,000 more annually than the same employee in rural America, reflecting the 25-percentage-point difference in locality adjustment.

Calculating Your 2026 Salary with the Pay Raise

To calculate your new 2026 salary with the pay raise, you need three pieces of information: your GS grade, your step, and your locality pay area.

Step-by-Step Calculation

Here's an example for a GS-9 step 4 employee in the Washington-Baltimore area:

• Step 1: Find your 2026 base salary from the GS pay table. A GS-9 step 4 in the base table (Rest of U.S.) is approximately $57,200.
• Step 2: Apply the 2.6% pay raise. $57,200 × 1.026 = $58,685.
• Step 3: Apply locality pay. The Washington-Baltimore locality adjustment is 23.17%. $58,685 × 1.2317 = $72,271.
• Result: Your 2026 salary is approximately $72,271.

The Office of Personnel Management publishes detailed pay tables for all 32 localities every January. You can access the 2026 GS pay tables on the OPM website by selecting your locality area and finding your grade and step intersection.

Impact of Step Increases vs. Pay Raises

Federal employees often experience a compound effect from both the annual pay raise and their step increase. If you're due for a step increase in 2026 (typically every 1-3 years depending on your step range), the combination is significant:

• Annual pay raise (2.6%): Applied to your entire salary across all grades and steps.
• Step increase (~3%): Applied only to employees advancing to the next step. This typically occurs after 1 year at steps 1-4, after 2 years at steps 5-8, and after 3 years at step 9.
• Combined effect: Employees receiving both a step increase and the 2.6% pay raise in the same year see a cumulative increase of approximately 5.7%.

For example, a GS-11 step 4 employee receiving both a step increase to step 5 and the 2.6% pay raise sees an approximate increase of $3,800-$4,200 depending on locality pay.

Special Pay Systems and Exceptions

While most federal employees use the General Schedule, some agencies use alternative pay systems that calculate increases differently:

• Senior Executive Service (SES): Career SES members receive the same 2.6% pay raise, but their pay is not structured by grade and step. Instead, they have individual pay rates approved by their agency.
• Wage Grade (WG): Blue-collar federal employees on the Wage Grade system receive the same percentage raise, applied to their hourly wage rate.
• Law Enforcement Officers (LEO): Federal law enforcement employees have special pay schedules but receive the same annual pay raise adjustment.
• Physicians and Other Specialists: Some agencies have special pay schedules for physicians, nurses, and other specialized roles. These typically receive comparable percentage raises.

How Pay Raises Impact Your Federal Retirement

Annual pay raises have a significant impact on your federal retirement benefits. Your FERS (Federal Employees Retirement System) pension is calculated as 1% to 1.1% of your high-3 average salary multiplied by your years of service. Each pay raise increases your high-3 calculation, and therefore your pension.

What to Do After the 2026 Pay Raise

Now that you understand the 2026 pay structure, consider these action steps:

• Verify your new salary: Check your paystub or the federal government's MyPay portal to confirm that the raise and any step increase were properly applied.
• Adjust your budget: While the 2.6% raise is modest, it may be time to review your TSP contributions, emergency savings, or other financial goals.
• Plan for future raises: If you're within a few years of a step increase, factor in that additional boost to your retirement planning.
• Consider locality pay changes: If you're considering a transfer to another geographic location, review the locality pay adjustment for that area to understand the financial impact.

The 2026 federal pay raise, while modest, is part of the predictable compensation structure that makes federal employment attractive to millions of workers. Understanding how the GS scale, locality pay, and annual raises interact helps you make informed decisions about your federal career and retirement planning.