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The Finalized Government Pay Raise For 2026: Why Federal Employees Received A 1.0% Base Increase

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The final figure for the 2026 federal employee pay raise has been set, and it is significantly lower than the statutory requirement, continuing a long-standing trend of under-market compensation for civilian workers. As of late December 2025, the President issued an Executive Order finalizing the pay adjustment for the General Schedule (GS) workforce, which took effect in January 2026.

This finalized increase provides a clear answer to the question "What is the government raise for 2026?" but also ignites fresh debate among federal employee unions and advocacy groups over the widening pay gap. The decision starkly contrasts with the much higher raise mandated by the Federal Employees Pay Comparability Act (FEPCA) and the separate increase granted to the military.

The Finalized 2026 Federal Civilian Pay Adjustment

The total pay adjustment for federal civilian employees is composed of two parts: a nationwide "base pay" increase and a "locality pay" adjustment, which varies by metropolitan area. For 2026, the final decision followed a pattern of providing a minimal base increase while foregoing the full locality adjustment.

1. Base Pay Increase: 1.0% Across-the-Board

The core of the 2026 pay adjustment for most federal employees under the General Schedule (GS) system was an across-the-board increase of 1.0%.

  • Recipient Group: Most civilian federal employees, including those under the General Schedule (GS) and other statutory pay systems.
  • Mechanism: The figure was finalized via an Executive Order signed by the President in December 2025, implementing an alternative pay plan.
  • Impact: This increase applies to the base salary of all eligible employees, regardless of their geographic location.

2. Locality Pay Adjustment: 0.0% Implemented

The final alternative pay plan for 2026 did not include a specific increase for locality pay.

  • Locality Pay Purpose: Locality pay is designed to close the gap between federal and non-federal salaries in specific geographic areas, such as New York, Washington D.C., and San Francisco.
  • 2026 Decision: The 1.0% raise was an across-the-board adjustment only, meaning there was no additional locality pay component added to the pay tables for the new year.
  • Note: This decision means that the pay gap—the difference between federal and non-federal salaries—remained significantly high heading into 2026.

The Stark Reality: FEPCA and the 24.72% Pay Gap

The 1.0% base pay increase for 2026 is a fraction of the amount mandated by law, highlighting a substantial and persistent pay disparity for the federal workforce. This context is critical for understanding the true value of the government raise.

The Statutory Requirement Under FEPCA

The Federal Employees Pay Comparability Act (FEPCA) of 1990 outlines a formula intended to achieve pay comparability between federal and non-federal jobs. Each year, the Federal Salary Council and the President's Pay Agent calculate the statutory raise required to close the pay gap.

  • FEPCA Base Raise Mandate: For 2026, the FEPCA formula called for a 3.3% across-the-board base pay increase.
  • FEPCA Locality Pay Mandate: The formula also required an average locality pay adjustment of 18.88% to close the pay gap fully.
  • The Reality: Presidents routinely invoke "national emergency" or "economic conditions" to issue an alternative pay plan, which is almost always lower than the FEPCA-mandated amount. The 1.0% base raise for 2026 is the result of such an alternative plan.

The Overall Pay Disparity

The gap between federal and non-federal salaries continues to be a major source of concern for recruitment and retention of skilled government workers. The Federal Salary Council’s findings paint a clear picture of the challenge.

  • Overall Disparity: The overall remaining pay disparity (pay gap) between General Schedule (GS) salaries and comparable private-sector salaries was calculated at 24.72% as of the March 2024 data used for the 2026 pay cycle.
  • The Effect: By implementing only a 1.0% base raise with no locality adjustment, the 2026 pay decision did virtually nothing to close this substantial gap, potentially making it harder for agencies like the Office of Personnel Management (OPM) to attract top talent.

Exceptions: Military and Federal Law Enforcement Pay Raises

While the majority of the civilian workforce received the 1.0% base increase, two specific groups were granted substantially higher pay adjustments for 2026, often set through separate legislative action like the National Defense Authorization Act (NDAA).

The 2026 Military Pay Raise: 3.8%

The U.S. military received a significantly higher pay increase for 2026, which was passed by Congress as part of the annual defense bill.

  • Final Military Raise: The National Defense Authorization Act (NDAA) for Fiscal Year 2026 authorized a 3.8% increase in basic pay for all uniformed servicemembers.
  • Comparison: This is nearly four times the base pay increase granted to civilian federal employees, highlighting the different mechanisms and political priorities involved in setting military vs. civilian compensation.

Federal Law Enforcement Personnel (LEO)

A notable exception within the civilian workforce was made for certain federal law enforcement personnel (LEO), who were often granted a higher total increase to address specific retention and recruitment issues.

  • Total LEO Increase: Certain federal law enforcement workers were planned to receive a total pay increase of 3.8%.
  • Breakdown: This total was composed of the standard 1.0% across-the-board base pay increase plus an additional 2.8% adjustment.
  • Alignment: This 3.8% total raise aligns with the military pay raise for 2026, reflecting a specific effort to maintain competitive compensation for these critical government roles.

The Road Ahead: 2027 Projections and Cost of Living Adjustments (COLA)

As the 2026 pay tables are implemented, attention immediately shifts to the next cycle. The debate over the federal pay gap, locality pay reform, and the future of the General Schedule (GS) pay system will continue to dominate discussions in the Office of Personnel Management (OPM) and Congress.

The 1.0% increase for 2026 will be reflected in the new GS pay tables, which are used to calculate the specific salary for each pay grade and step. Union groups like the National Treasury Employees Union (NTEU) continue to lobby Congress for a higher, more competitive pay increase for the following year, arguing that the current rates do not keep pace with inflation or private-sector salary growth.

Furthermore, the Cost of Living Adjustment (COLA) for federal retirees and beneficiaries of the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) is calculated separately from the civilian pay raise and is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The Finalized Government Pay Raise for 2026: Why Federal Employees Received a 1.0% Base Increase
What is the government raise for 2026?
What is the government raise for 2026?

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