2026 GS Pay Scale and Locality: Federal employees will enter 2026 with a modest pay adjustment following the President’s executive order approving a 1% increase to base General Schedule (GS) pay. However, locality pay percentages — the geographic adjustments added to base salaries — remain unchanged for the year. The decision has prompted questions across agencies, particularly from employees who expected a larger boost.

While this is not a pay freeze, it is a “base-only” increase. That distinction matters. The General Schedule system, administered by the Office of Personnel Management, calculates total salary using base pay plus a locality percentage tied to where an employee works. Because locality multipliers remain frozen, overall salary growth will be smaller than in years when both components rise.

What a Base-Only Increase Means in Practical Terms

The 1% adjustment applies strictly to the underlying GS pay grid. Every grade and step increases slightly. Your locality rate — whether you are in Washington, D.C., a major metro area, or the “Rest of U.S.” category — stays the same percentage used in 2025.

To calculate your updated salary, apply your existing locality percentage to the new, higher base pay. Because the base number is marginally larger, the dollar value of the locality portion also increases. For example, if your base salary rises by $800, your locality pay — calculated as a percentage of base — increases proportionally. The result is a modest bump in gross pay rather than a dramatic jump.

Why Some Employees Expected More

In several prior years, federal pay adjustments were split between base pay and locality rates. That approach allowed high-cost regions to see stronger total increases. In 2026, all available adjustment authority was directed toward base pay, leaving locality percentages unchanged.

This has particular implications for employees in expensive metropolitan areas. Although their salaries technically rise, the gap between federal and private-sector wages in some cities may widen if local labour markets continue to grow faster than federal adjustments. In practical terms, employees in high-cost areas may feel the limited increase more sharply.

Proposed Locality Changes That Did Not Materialise

Prior to the executive order, advisory discussions had considered creating new locality pay zones in certain regions where federal wages lag private-sector data. Without allocated funding for locality adjustments, those proposals were not implemented for 2026.

Employees in areas that hoped to move out of the “Rest of U.S.” category remain in that classification. For some, this may represent a missed opportunity for a higher locality multiplier. However, future reviews could revisit these recommendations depending on budget conditions and labour market data.

Inflation Pressures and Real Purchasing Power

A 1% raise is technically positive, but its real value depends on inflation and personal expenses. If healthcare premiums, housing costs, or transportation expenses increase faster than wages, take-home purchasing power may not improve significantly. For some employees, higher benefit deductions could absorb much of the gain.

Financial planners often recommend reviewing benefit elections during Open Season and reassessing tax withholding to understand how the pay change affects net income. In many cases, the difference in each paycheck may appear small once deductions are applied.

Retirement Calculations and the High-3 Impact

For employees nearing retirement under the Federal Employees Retirement System (FERS), the 2026 adjustment has a minor but measurable effect. Pension benefits are calculated using the highest three consecutive years of basic pay, which includes locality adjustments.

Because base pay increased, the High-3 average will rise slightly beginning in 2026. However, compared with years that saw larger adjustments, the long-term pension impact is limited. Employees planning to retire soon may wish to run updated estimates to see how the smaller increase affects projected annuity income.

Special Salary Rate Exception

Not all federal positions follow the standard GS locality framework. Certain occupations, particularly in law enforcement and other high-demand fields, are covered under Special Salary Rate (SSR) tables. These tables operate independently of the general locality map.

Employees in SSR-covered roles may receive different percentage adjustments in 2026 based on recruitment and retention priorities. To confirm eligibility, workers should review their most recent SF-50 form and compare it against official pay tables issued by their agency.

When the Raise Will Appear

The new rates take effect at the beginning of the first full pay period in January 2026. Due to the federal biweekly payroll cycle, most employees will see the increase reflected in late January or early February paychecks. The exact date depends on agency payroll processing and individual banking timelines.

Employees are encouraged to review their earnings and leave statements carefully to verify grade, step, and locality coding accuracy. Small administrative errors can affect salary calculations, so early verification is recommended.

Clarification: A frozen locality percentage does not mean zero raise. Total pay increases slightly because the base GS schedule increased by 1%.

Limitation Note: Net take-home pay will vary depending on taxes, insurance premiums, retirement contributions, and other payroll deductions.

Disclaimer: This article is intended for informational purposes only and should not be considered financial or retirement advice. Employees should consult official government pay tables or a qualified financial professional to assess how the 2026 pay adjustment affects their individual situation.