GS Pay Raise 2026: What Changed

Recent Federal Pay Raise History

The 2026 raise of 1% is the smallest since the 2020 raise of 3.1% (which included locality adjustments). Here is the recent history of GS pay raises:

2024: 5.2% overall (4.7% base + 0.5% locality). 2023: 4.6% overall (4.1% base + 0.5% locality). 2022: 2.7% overall (2.2% base + 0.5% locality). 2021: 1.0% base (no locality increase). 2020: 3.1% overall (2.6% base + 0.5% locality). 2019: 1.9% overall (1.4% base + 0.5% locality). These figures represent the overall average; individual locality areas may differ.

The 2026 raise is notable for being the first since 2021 with zero locality pay adjustment. The combination of a modest base increase and frozen locality pay means the effective raise is exactly 1% for all GS employees regardless of location.

Impact Relative to Inflation

The Consumer Price Index (CPI) increased approximately 2.5-3% in the 12 months preceding the 2026 pay raise. This means the 1% raise represents a real purchasing power decline for federal employees. The Federal Salary Council has consistently argued that the accumulated FEPCA pay gap (27.54% as of March 2023) harms federal recruitment and retention. The 2026 raise widens this gap further in real terms.

How the Raise Was Determined

Under 5 U.S.C. §5303, the default formula would calculate a base pay increase tied to the Employment Cost Index (ECI). Under 5 U.S.C. §5304, locality adjustments would further increase pay based on BLS wage surveys. However, the President has authority under 5 U.S.C. §5303(b) and §5304a to issue an "alternative pay plan" that sets a different amount. Every President since FEPCA's 1990 enactment has used this authority, and the full FEPCA-recommended increase has never been implemented.

For 2026, the initial FY2026 budget proposal was silent on a civilian pay raise (implying 0%). The final 1% was finalized by executive order in December 2025. Source: OPM January 2026 Pay Adjustments Memo.

What This Means for Your Long-Term Compensation

The pay raise affects more than just your current paycheck. It permanently raises your base salary, which compounds over time through future annual increases. It raises your high-3 average for pension purposes. It increases your TSP contributions in dollar terms (if you contribute a percentage). And it raises the Executive Level IV pay cap ($197,200 in 2026, up from $195,200 in 2025), allowing some GS-15 employees in high-locality areas to see slightly higher effective pay.

Congressional Alternatives and FEPCA Reform

Members of Congress have periodically proposed legislation to provide larger federal pay raises or to reform the FEPCA process. For 2026, Rep. Gerry Connolly (D-VA) proposed the FAIR Act, which called for an 8.7% average pay raise. This legislation did not advance. The fundamental tension persists: FEPCA recommends adjustments based on BLS wage surveys, but every President uses the alternative plan authority to implement smaller increases, citing budgetary constraints. Some observers have called for reforming FEPCA to set a mandatory floor for locality adjustments or to remove the presidential override authority, but no such reform has been enacted.

Planning for Future Pay Raises

Federal pay raises are announced by the President's alternative pay plan, typically issued in late August or early September for the following January. The final pay tables are published by OPM in December. Employees should monitor FedSmith, Federal News Network, and OPM announcements for updates. Our calculator is updated each January when new OPM pay tables are published.

The Pay Raise and Federal Morale

Survey data from the Federal Employee Viewpoint Survey (FEVS) consistently shows that pay satisfaction is one of the lowest-rated areas for federal employees. The 2026 raise of 1%, below the rate of inflation, is likely to further erode satisfaction. Combined with ongoing workforce reductions, increased performance accountability requirements, and the elimination of the FERS annuity supplement (effective 2028), federal employees face a challenging compensation environment.

For individual financial planning, the modest raise reinforces the importance of maximizing available benefits: contributing at least 5% to TSP for the full match, enrolling in the most cost-effective FEHB plan, and taking advantage of pre-tax deductions (FSA, FEHB Premium Conversion) to reduce tax burden. Our calculator helps you see the net impact of all these choices on your actual take-home pay.

Comparing Military and Civilian Pay Raises

In 2026, the military received a 3.8% pay raise while standard GS employees received 1%. This divergence—the largest in recent memory—reflects policy priorities favoring defense and law enforcement compensation. Historically, military and civilian pay raises have been loosely linked (the President's alternative pay plan often references the ECI, which informs both). The 2026 gap has drawn criticism from federal employee organizations including AFGE and NARFE, who argue that the disparity undermines morale among the civilian workforce, particularly for employees in agencies supporting national security missions.

For federal employees considering military-to-civilian transitions (or vice versa), the pay raise disparity is one factor among many. Military compensation includes housing allowances (BAH), subsistence allowances (BAS), and favorable tax treatment for combat zone pay that civilian GS pay does not replicate. Conversely, federal civilian positions offer locality pay, flexible telework arrangements, and the ability to choose your geographic location, which military service generally does not.