2026 Federal Pay Raise: The White House has formalized the 2026 federal employee pay raise through an Executive Order, announcing a 1% across-the-board increase for General Schedule (GS) civilian employees. Notably, this adjustment does not include locality-based pay, making it the smallest standard annual raise since 2021. The change takes effect with the first applicable pay period beginning on or after January 1, 2026, impacting thousands of federal workers nationwide.
This development comes amid ongoing discussions about federal compensation and cost-of-living adjustments. For employees in high-cost regions, the absence of locality pay adjustments may limit the practical impact of the raise. Nevertheless, the increase reflects the administration’s approach to balancing federal payroll growth with broader budgetary considerations.
Overview of the 2026 GS Pay Scale Update
The Office of Personnel Management (OPM) has published the 2026 GS pay tables, showing annual rates by grade and step. These tables incorporate the 1% increase for base pay but exclude any locality-based comparability payments. The adjustment aligns with earlier proposals issued by the White House as part of its alternative pay plan for federal employees.
The GS pay schedule affects most civilian federal employees, spanning grades 1 through 15. While the nominal raise may seem modest, it still represents a tangible increase in annual income, particularly for employees in lower and middle GS grades. Experts suggest that understanding the exact step increments is essential for employees projecting their earnings in 2026.
Implications for Federal Employees and Budget Planning
For federal workers, a 1% raise may slightly improve household budgeting but may not fully offset inflationary pressures in high-cost areas. Analysts note that without locality adjustments, employees in cities with high living expenses may see limited net gain from this raise. This context is important for personal financial planning and may influence considerations like housing and commuting costs.
The Executive Order also affects planning at the agency level. Departments must adjust payroll systems to reflect the new rates and communicate changes to employees. Payroll administrators are encouraged to verify step placement and grade calculations to prevent discrepancies in January 2026 paychecks.
Comparison with Previous Years and Pay Trends
The 1% increase is smaller than prior years, reflecting cautious federal spending approaches. For example, between 2019 and 2021, annual GS increases typically ranged from 1.5% to 3%. This downward adjustment highlights ongoing pressures to manage federal payroll growth while balancing budget constraints.
Historically, federal pay adjustments included both base and locality pay increases. In 2026, the decision to exclude locality increments makes the raise less impactful for employees in metropolitan regions. This distinction emphasizes the importance of understanding both base and locality components when evaluating overall compensation.
Executive Order Details and Affected Pay Systems
The Executive Order covers multiple statutory pay systems beyond the GS schedule, including the Foreign Service, Veterans Health Administration, Senior Executive Service, and selected positions in the executive, legislative, and judicial branches. Uniformed service members and administrative law judges are also addressed, with specific schedules outlined for their respective pay adjustments.
Additionally, the OPM Director has the authority to evaluate whether certain federal law enforcement personnel may receive additional pay adjustments up to 3.8%, inclusive of the base increase. Verification is recommended for employees in these categories to determine eligibility and confirm payroll entries.
Real-World Example: Impact on a Mid-Level Federal Employee
Consider a GS-9, Step 5 employee in the Department of Health and Human Services. With the 1% increase applied to their base salary, the annual raise may amount to several hundred dollars. While modest, this increment can help cover minor household expenses or supplement retirement contributions. Employees without locality pay adjustments in high-cost cities may find that the raise covers only a fraction of inflation-driven increases in living costs.
This scenario illustrates the practical effect of the Executive Order. Even with a small raise, understanding step progression, grade changes, and potential additional adjustments for law enforcement personnel is essential for precise financial planning.
Verification and Compliance Guidance
Employees are advised to review OPM’s published 2026 GS pay tables and confirm that payroll reflects the new rates. Agencies are responsible for ensuring accurate implementation, and employees should report discrepancies promptly. Verification is recommended before the first pay period in January 2026 to avoid underpayments.
Understanding the interplay between base pay, step increases, and potential locality adjustments is critical. Federal employees in specialized positions should also consult human resources offices or OPM guidance to confirm their specific pay schedules and eligibility for any supplementary adjustments.
Disclaimer
This article is for informational purposes only and does not constitute legal, financial, or employment advice. Pay raises, schedules, and adjustments are subject to federal statutes, OPM directives, and executive decisions. Individual compensation may vary based on grade, step, locality, and agency-specific provisions. Verification through official OPM resources and agency payroll offices is recommended.