Federal Worker Pay Increase 2026: The majority of federal civilian employees will receive a 1% pay increase in 2026, the lowest yearly increase since 2021, according to an executive order just issued by President Donald Trump. The directive, which went into effect on December 18, is in line with Trump’s alternative pay proposal from early August, which also called for a uniform 1% rise for most civilian federal employees the following year.
Updated compensation tables covering several federal pay systems, including “locality-based comparability payments” schedules, have been released by the White House. Nevertheless, no locality pay increases for 2026 are permitted by the executive order. Following January 1, 2026, the salary increase will be implemented during the first full pay period.
Federal Employees Alert: 2026 Pay Raise Amount
The federal pay increase for 2026 is now official. President Trump has signed an executive order affirming a 1.0% salary increase for civilian government employees, much to the delight of federal employees. The locality pay rates were not changed. There will be a 3.8% pay raise for active US military personnel.
Despite its limitations, the raise prevents a salary freeze after a protracted government shutdown earlier this year. Hundreds of thousands of workers lost their jobs during that time due to extensive layoffs throughout federal agencies. In light of the potential for additional cuts later in the year, those who stay are still under pressure.
Additionally, the 1% raise is insufficient to cover inflation and recent increases in living expenses. In the upcoming year, average rates under the Federal Employees Health Benefits Program are predicted to rise by almost 12%.
Federal Pay Raise 2026
The 1% increase won’t be given to every federal employee. In 2026, salary increases of up to 3.8% are scheduled for members of the military forces, and certain federal law enforcement officers may also be eligible for such increases. Which civilian law enforcement positions would be eligible for the larger increase is not specified in the executive order.
The American Federation of Government Employees (AFGE) claims that federal compensation is still, on average, 27% less than that of comparable positions in the private sector, which exacerbates outsourcing, persistent labor shortages, and recruitment and retention challenges.
2026 Pay Increase for Federal Employees
The reality is a little more modest for government employees hoping for a big pay boost in 2026. The basic pay of the majority of federal employees is subject to the 1.0 percent universal pay increase. This implies that your basic pay will rise by 1.0 percent regardless of your position or General Schedule (GS) grade, and the portion of that increase that will be utilized to calculate locality pay will remain unchanged.
Executive Order Completing 1.0% Pay Increase for All
The presidential order confirms the 1.0 percent universal pay increase for 2026 that was initially announced in August along with the White House alternative compensation plan. The majority of civilian federal employees’ base pay is affected by this increase, per OPM guidelines.
Even though this salary increase offers some financial respite, many federal employees are wondering if it is enough, particularly in light of growing living expenses and other financial strains that affect federal workers. Due to distinct congressional processes governing their remuneration, military personnel receive a 3.8% pay increase. In 2026, the COLA for FERS retirees will be 2.0%.
Effects on Federal Employees and Local Pay
The fact that locality pay rates have not changed is a major source of controversy. The purpose of locality pay for federal employees is to compensate for variations in cost of living in different designated pay areas within the United States.
Federal employees in high-cost areas will continue to receive the locality rates, but at the same rate as in 2025, due to the lack of locality pay increases. This can have a substantial effect on the financial security of federal employees who qualify for locality pay, especially those who work in costly regions.
Comparing Federal Government Pay Increases in the Past
The 2026 wage boost is comparable to the modest increases observed during the first Trump administration when compared to prior years. President Biden finalized some of the largest salary increases since the late 1970s. Biden’s most recent salary increase in 2025 was 1.7% overall and 2.0% on average for locality pay.
Some feds are now concerned about the lack of meaningful changes to locality pay. Given that non-federal compensation frequently draws workers to the private sector, this calls into question the government’s commitment to luring and keeping top talent within the federal workforce.
Federal Employee Pay Increase’s Financial Effects
Many federal employees are wondering if the 1.0 percent federal pay increase in 2026 would be enough to keep up with inflation. Regretfully, the answer is probably not. Federal employees may see a decrease in their purchasing power because inflation rates frequently surpass this 1.0 percent increase.
Impact of the 2026 Pay Increase on the FERS Pension Calculation
The FERS annuity computation will be slightly impacted by the 2026 federal wage increase. A 1.0 percent rise in base pay may have a minor impact on the ultimate retirement annuity because the amount of a federal pension is determined by an employee’s high-three average wage. Given the modest wage increase in 2026, federal employees should carefully examine their retirement plans and think about other ways to increase their retirement income.