General schedule employees who are promoted to a higher grade without a break in service are covered by the two-step promotion rule (pay upon promotion), which states that the employee is entitled to basic pay at the lowest rate of the higher grade that exceeds his or her existing rate of basic pay by not less than two step increases of the grade from which promoted.

Differing rules apply if an employee’s official worksite is changed to a new location upon promotion where different pay schedules apply.


If the employee is covered by the same pay schedules before and after promotion, or if the employee is covered by different pay schedules before and after promotion and if the alternate method will produce a higher payable rate upon promotion than the standard method.

Special rules also apply if an employee was receiving a retained rate before promotion. These rules are at 5 CFR 531.203 – 531.206, 531.214, and 531.243.