As the new year begins, millions of government workers are eager for a bump in pay to help keep up with increased costs of living. Although the government announced a proposed 2% average pay increase at the end of 2024, certain factors can make this higher or lower for certain employees.
Read on to learn about the federal pay raise in 2025, what it includes, and what this means for federal employees’ take-home pay.
Understanding How Federal Pay Raises Work
To explain the upcoming pay raise, we need to explore the history of the federal pay raise process. According to various sources, federal employee pay has lagged behind the private sector for decades.
In 1990, Congress passed the Federal Employees Pay Comparability Act (FEPCA). This law aimed to close the pay gap between federal employees and their private-sector counterparts.
It employed several mechanisms to achieve this balance. For one, it established locality pay so employees in higher-cost areas could receive additional pay.
FEPCA also mandated an annual survey of private-sector pay to compare with federal salaries so that federal income continued to match the market.
Critically, FEPCA states that federal pay will automatically increase to match private-sector pay unless the President proposes a different pay raise amount because of an “economic emergency.”
Congress can either alter the President’s proposed raise or remain silent, allowing the President’s proposal to take effect.
Ever since FEPCA took effect in 1994, presidents have generally used a minor provision within the law to prevent federal pay from fully catching up to private-sector pay.
Specifically, if the President claims that an “economic emergency” affects the general welfare, they can implement a different pay increase. Congress generally defers to this claim.
What Is the Federal Pay Raise for 2025?
On December 23, 2024, President Biden signed an executive order finalizing an average 2% increase in pay for federal workers in the General Schedule (GS) for 2025.
Notably, this year’s raise is less than half of the pay bump federal workers received in 2024. Overall, the 2% average marks the lowest pay adjustment the administration has approved since Biden assumed the presidency in 2021.
When President Biden announced the 2025 federal employee pay raise, many were dismayed at the proposed adjustments. Numerous lawmakers and advocacy groups called for Biden to grant civilian federal employees the 4.5% average pay increase proposed for military service members in the coming year.
Despite these requests, the administration held firm. The approved 2% average pay increase went into effect for federal employees in the first full pay period of January 2025.
What Does a 2% Average Pay Raise Mean?
There are two parts to the 2% average boost federal employees can expect in 2025:
- 1.7% increase in pay for GS civilian employees across the board, and
- 0.3% average adjustment to locality pay.
Since changes to locality pay are determined by region, the administration’s finalized pay adjustment is an average. Federal employees could see individual salary bumps of slightly more or slightly less than 2%.
Is There a Federal Pay Raise 2025 Calculator?
The OPM has a calculator that GS employees can use to determine the salary for workers of their locality and grade in 2025.
For a quick estimate of your salary with the proposed 2025 federal pay raise, you can also multiply your current pay by 1.02. However, remember that your actual 2025 salary may be slightly less or more than that estimate, depending on your locality.
Am I in a Locality Pay Area?
As of 2025, the country will have 58 pay locality areas. These include the following areas:
- The entire state of Alaska;
- The urban area around Austin and Round Rock, Texas;
- The Denver, Colorado metropolitan area; and
- The Los Angeles metropolitan area.
Most major cities have their own locality pay area. The highest locality pay is currently the San Jose-San Francisco-Oakland, CA area.
Questions About Your Federal Pay or Benefits? We Can Help.
Federal pay is a surprisingly tricky topic to understand. Yet, it pales compared to other federal employment issues like disability, retirement, employment discrimination protections, and Title 38 rights.
At the Federal Employment Law Firm of Aaron D. Wersing, PLLC, we love helping our clients make sense of their rights and responsibilities.
We practice exclusively on federal employment issues, so we have ample experience deciphering even the most complex topics.
Give us a call today, or get in touch with us to set up an initial consultation.
Aaron Wersing, Attorney at Law
Aaron Wersing is the founder of the Law Office of Aaron D. Wersing. Mr. Wersing graduated from the Georgia State University College of Law with a Doctorate in Jurisprudence and was the recipient of the CALI Excellence for the Future Award. Mr. Wersing previously attended the University of Georgia, where he received a Bachelor of Business Administration degree in Accounting. Mr. Wersing is an active member of his local community. Mr. Wersing acts as a volunteer attorney with Houston Volunteer Lawyers, the pro bono legal aid organization of the Houston Bar Association. He is also a member of professional legal organizations such as the National Employment Lawyers Association and the American Inns of Court. To reach Aaron for a consultation, please call him at (833) 833-3529.
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