1% Federal Pay Raise Approved for 2026 – Here’s How It Impacts GS Workers

Federal employees across the United States have finally received a definitive answer regarding their compensation for the upcoming year. After months of deliberation and various legislative proposals, a 1% across-the-board pay raise has been officially approved for General Schedule (GS) workers in 2026. This adjustment, while modest compared to the higher increases seen in previous years, serves as the baseline for the federal workforce’s financial planning. The decision was solidified through an executive order that prioritizes fiscal restraint while ensuring a basic cost-of-living adjustment for civilian personnel. For most employees, this change will be reflected in their first full pay period starting on or after January 1, 2026.

Understanding the Mechanics of the 1% Base Increase

The 2026 pay adjustment is structured differently than some prior years. Specifically, the 1% increase applies exclusively to the base pay rates of the General Schedule. Unlike 2024 or 2025, where locality pay—a geographic differential based on the cost of labor in specific regions—saw its own independent boost, the 2026 plan freezes locality percentages at their 2025 levels. This means that while your total paycheck will increase because the “multiplier” is being applied to a larger base number, the geographic percentage itself remains static. This strategy ensures that every federal employee, regardless of their duty station, receives an equal percentage increase in their base salary.

2026 GS Pay Scale: Base Salary Projections

To help you visualize how this shift impacts your annual earnings, it is helpful to look at the raw numbers across different grades and steps. Since the locality percentages are not moving, the growth is uniform across the table. For instance, a GS-5 at the start of their career and a GS-15 in a senior leadership role will both see exactly 1% added to their 2025 base figures. This predictable growth allows for more straightforward retirement and tax planning, though it may feel less impactful for those living in high-cost metropolitan areas where inflation has been more aggressive.

The “Locality Freeze” and Its Geographic Impact

The decision to freeze locality pay at 2025 levels is a significant point of discussion for workers in cities like Washington, D.C., San Francisco, and New York. While these employees will still see a 1% increase in their total pay (because their existing locality percentage now applies to a higher base), they will not see the “locality boost” that often bridges the gap between federal and private-sector salaries. For those in the “Rest of U.S.” (RUS) category, the impact is largely the same as those in high-cost areas, maintaining the status quo in the pay disparity between different regions of the country.

Targeted Increases for Law Enforcement

While the 1% raise is the standard for the vast majority of the civilian workforce, there is a notable exception for federal law enforcement officers (LEOs). In a move to address recruitment and retention challenges within critical agencies, certain LEO positions will receive a more substantial total increase of approximately 3.8%. This is achieved by combining the 1% base increase with a targeted special salary rate adjustment of roughly 2.8%. This divergence highlights the government’s current priority on border security and public safety, ensuring that front-line officers receive compensation more closely aligned with military pay raises for the same year.

Impact on Retirement and High-3 Calculations

For federal employees nearing the end of their careers, even a modest 1% raise has long-term benefits. Since your “High-3” average—the figure used to calculate your FERS or CSRS pension—is based on your highest three consecutive years of basic pay (which includes locality pay), any increase in salary helps elevate that final annuity. While a 1% bump won’t drastically shift the needle compared to a 5% raise, it prevents the “stagnation” of retirement benefits that occurs during a full pay freeze. Employees should ensure their SF-50 forms correctly reflect these changes in early 2026 to ensure their retirement records remain accurate.

Budgeting for 2026: The Real-World Takeaway

In practical terms, a 1% raise means an extra $40 to $100 per month for the average GS worker before taxes and deductions. Given that healthcare premiums and other benefit costs often rise annually, many federal workers may find that this pay increase is largely absorbed by higher insurance costs or inflation in consumer goods. Financial experts suggest that employees use the first few months of 2026 to review their Thrift Savings Plan (TSP) contributions and tax withholdings. With a slightly higher gross pay, you may be able to nudge your retirement contributions up just enough to maintain your current take-home pay while building a larger nest egg.

Looking Ahead to Future Adjustments

The 2026 pay raise process serves as a reminder of how the federal pay system balances economic conditions with budget constraints. While unions like the NTEU and AFGE often advocate for raises that match the private sector’s “pay parity,” the final number is frequently a compromise between the President’s alternative pay plan and Congressional appropriations. As we move further into 2026, the focus will quickly shift to the 2027 budget cycle, where workforce advocates hope for a more robust adjustment to address the widening gap between federal and private-sector wages.

FAQs

Q1. When will I see the 1% raise in my paycheck?

The raise is effective on the first day of the first full pay period in 2026. For most federal employees, this begins on January 11, 2026, meaning the increase will appear in the paychecks received in late January or early February.

Q2. Does the 1% increase apply to locality pay?

No, the 1% increase applies only to the base pay. The locality pay percentages have been frozen at their 2025 levels. However, because your locality pay is a percentage of your base pay, the actual dollar amount of your locality adjustment will increase slightly.

Q3. Why did law enforcement officers get a higher raise?

The administration authorized a total 3.8% increase for certain law enforcement categories to address critical recruitment and retention issues. This higher rate matches the 2026 military pay raise and is implemented through special salary rate authorities.