New Year Brings New Finances

The arrival of the new year brings changes in the financial pictures of federal employees and retirees, some due to legislative action and some due to routine adjustments.

For most employees, of course, the most important compensation element is that a 1.9 percent average GS raise will be paid, effective with the first full pay period of the year (for most, that starts January 7; some agencies are on different payroll cycles).

The amounts will vary by locality from 1.67 to 2.29 percent, 1.4 percent of that paid as an across the board component and the remainder as locality pay. Due to the accumulated value of locality raises over the years, the San Francisco locality will remain the highest-paid, even though it is getting only the second-largest 2018 raise (2.21 vs. the 2.29 in Washington-Baltimore). New York is the second highest, followed by Houston, Los Angeles and Washington-Baltimore.

The catchall “rest of the U.S.” is the lowest-paid and also is receiving the smallest raise; that locality has the greatest number of employees, however.

Wage grade employees, who are under a separate locality pay system, will get the same raise applying to GS employees in their area, up to 2.13 percent; wage grade raises are paid at differing times of the year, varying by location.

Most “special rate” employees – who receive higher salary for being in high-demand positions–will receive the 1.4 percent across the board component plus their special rate add-on. Some special rates will be eliminated because locality pay will have exceeded them; an individual gets the higher of the special rate or accumulated locality pay, but not both.

The GS pay cap–which will affect those in the top steps of GS-15 in several localities–will increase from $161,900 to $164,200 and the SES cap from $187,000 to $189,600.