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Update: White House announced 1.0% across-the board federal pay raise. Will federal employees see a 2026 pay raise, or a pay freeze ? (It’s still not official) Explore the likelihood of a 2026 federal employee pay increase and its impact. Also – an overview of the historical context.
Zero Percent Pay Raise in 2026 for Federal Employees Looking More Likely – What it Means for Feds
Regarding the annual salary increase for federal workers, the 2026 federal pay raise is looking more like a pay freeze (a 0% across-the-board raise and a 0% locality pay increase). The last time federal agencies experienced a pay freeze was during the Obama administration. This article will examine the upcoming year’s pay increase for the federal workforce, the history of pay raises for federal government employees by year and president, and then a general overview of compensation for the civilian workforce.
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Why the 2026 Pay Raise for Federal Employees will Likely Be Zero for Both Base Pay and Locality
Despite the FAIR act recommending an average 4.3 percent and the National Treasury Employees Union (NTEU) advocating for the same proposal, the White House has consistently signaled that annual federal pay adjustment for 2026 will be nonexistent. With no inclusion in the big budget appropriation bill that passed at the beginning of July, the chances of lawmakers on Capitol Hill passing legislation to give the federal workforce a pay increase is now highly unlikely.
Approaching Deadline for Alternative Pay Plan to Override Automatic Pay Raise for Federal Workers
Due to the Federal Employee Pay Comparability Act (FEPCA) that Congress passed in 1990, there would be an automatic raise of over 20% to keep the GS pay scale competitive with private sector pay rates. However, as in every year in the past few decades since FEPCA passed, the President can override this automatic increase by issuing an alternative pay plan to OPM (office of personnel management) before the deadline set at August 31. Despite the Federal Salary Council suggesting the 2026 pay increase should be an average of 3.3%, 1.3 percentage points higher than the 2.0% average raise that feds got in 2025, the current administration’s focus on reducing government spending indicates the pay freeze recommended in the White House’s budget plan will be the alternative pay plan proposed by the end of this month. The recommendation from the pay committee was based off the 3.8% jump in 2024 that the ECI (Employment Cost Index) saw that year.
Locality Pay Likely to Remain at 2025 Levels when White House Publishes Alternative Pay Plan
The annual raise consists of two components, the across-the-board increase and a locality-based increase. The average of the locality pay typically tacks on an additional 0.3% to the standard raise, but this too is determined by the President and all indicators currently point to both components being “frozen” at the same levels as the 2025 GS pay tables. There is a lot of confusion as to how locality pay works and is determined, which is why some assume the average 0.3% locality adjustments are automatic, but after meticulously researching the topic, I found the President’s Pay Agent as well determines any adjustments to locality pay, too. We’ll have to wait until the end of the month for the alternative pay plan to be published but it will likely propose neither a basic wage increase or any adjustments to locality rates.
2026 COLA Estimate for FERS, CSRS, and Social Security Retirement Benefits
The annual raise for active workers is different than the COLA for retirees receiving a FERS or CSRS pension. The COLA for FERS and CSRS is based off the adjustment to Social Security retirement benefits, which are in turn determined by the CPI-W (consumer’s price index), which measures inflation. The current estimates project a 2.7% COLA for CSRS and Social Security, which would result in a flat 2.0% adjustment for FERS annuitants.
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Historical Chart of Pay Raises for the Federal Government’s Civilian Workforce
Every annual boost to federal salaries from 1970 to 2026, by president and year:
| Year | Federal Pay Raise | Year | Federal Pay Raise | Year | Federal Pay Raise | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1970 | 6.0% | Nixon | Republican | 1990 | 3.6% | Bush | Republican | 2008 | 3.5% | Bush | Republican |
| 1971 | 6.0% | Nixon | Republican | 1991 | 4.1% | Bush | Republican | 2009 | 3.9% | Bush | Republican |
| 1972 | 10.9% | Nixon | Republican | 1992 | 4.2% | Bush | Republican | 2010 | 2.0% | Obama | Democrat |
| 1973 | 4.8% | Nixon | Republican | 1993 | 3.7% | Bush | Republican | 2011 | 0.00% | Obama | Democrat |
| 1974 | 5.5% | Nixon | Republican | 1994 | 4.0% | Clinton | Democrat | 2012 | 0.00% | Obama | Democrat |
| 1975 | 5.0% | Ford | Republican | 1995 | 2.6% | Clinton | Democrat | 2013 | 0.0% | Obama | Democrat |
| 1976 | 4.8% | Ford | Republican | 1996 | 2.4% | Clinton | Democrat | 2014 | 1.0% | Obama | Democrat |
| 1977 | 7.0% | Ford | Republican | 1997 | 3.0% | Clinton | Democrat | 2015 | 1.0% | Obama | Democrat |
| 1978 | 5.5% | Carter | Democrat | 1998 | 2.9% | Clinton | Democrat | 2016 | 1.0% | Obama | Democrat |
| 1979 | 7.0% | Carter | Democrat | 1999 | 3.6% | Clinton | Democrat | 2017 | 2.6% | Obama | Democrat |
| 1980 | 9.1% | Carter | Democrat | 2000 | 4.8% | Clinton | Democrat | 2018 | 1.6% | Trump | Republican |
| 1981 | 4.8% | Carter | Democrat | 2001 | 3.7% | Clinton | Democrat | 2019 | 1.9% | Trump | Republican |
| 1982 | 4.0% | Reagan | Republican | 2002 | 4.6% | Bush | Republican | 2020 | 3.1% | Trump | Republican |
| 1984 | 4.0% | Reagan | Republican | 2003 | 4.1% | Bush | Republican | 2021 | 1.0% | Trump | Republican |
| 1985 | 3.5% | Reagan | Republican | 2004 | 4.1% | Bush | Republican | 2022 | 2.7% | Biden | Democrat |
| 1987 | 3.0% | Reagan | Republican | 2005 | 3.5% | Bush | Republican | 2023 | 4.6% | Biden | Democrat |
| 1988 | 2.0% | Reagan | Republican | 2006 | 3.1% | Bush | Republican | 2024 | 5.2% | Biden | Democrat |
| 1989 | 4.1% | Reagan | Republican | 2007 | 2.2% | Bush | Republican | 2025 | 2.0% | Biden | Democrat |
| 2026 | 0.0%* | Trump | Republican | ||||||||
| *not yet finalized |
Note the only pay freezes in history came during the Obama administration as a response to the financial crisis that occurred just before he became president. At the end of 2012, president Obama signed an executive order to give federal workers a 0.5% pay raise for the following year, but this was reversed by a subsequent executive order signed in April 2013. Congress had initiated a pay freeze for all GS pay rates and locality areas from 2010 to 2013 that the White House could not override despite trying. Nonetheless, pay raises for the federal government’s workforce has generally been a bipartisan matter with both parties having historical tendencies to bolster the salaries of career government workers.
How Federal Workers Can Mitigate Impact of No Pay Increase in 2026
With an average increase of 3.3% suggested by the federal salary council, some are possibly hopeful for a pay increase. However, the uncertainty surrounding budget appropriations and potential pay freeze scenarios necessitates that federal workers take proactive measures in their financial planning. As inflation continues to rise, the impact on federal pay becomes a pressing concern. The National Treasury Employees Union (NTEU) and other labor organizations are advocating for a fair adjustment (4.3%)to ensure that federal employees maintain their purchasing power. Despite the likelihood of a pay freeze in the coming years, it’s crucial for federal workers to prepare for their financial future. Step one? Finding a financial planner federal employees can trust.
How Fiduciary Financial Advisors Specializing in Federal Benefits Can Help
With retirement goals in mind, federal employees need to maximize their Thrift Savings Plan (TSP) and other investment options. Proper allocation of savings can help mitigate the effects of a possible pay freeze and increasing cost-of-living expenses. By working with an advisor, federal employees can develop their investment strategy, incorporating their Federal Employees Retirement System (FERS) benefits.
Ultimately, the 2026 federal pay raise remains uncertain, but with the right planning and support from a fiduciary financial planner, federal employees can work towards achieving their retirement goals despite economic pressures. In a landscape of rising inflation and potential pay freezes, taking action now is more important than ever. Schedule a free consultation here.
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Federal Employee Benefits Consultants (ChFEBC℠), and Accredited Investment Fiduciary (AIF) professionals. At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
