GS PayScale 2025: Key Updates for Federal Employees
Whether you’ve spent decades in public service or recently transitioned from a military role, the looming changes in the GS PayScale 2025 have raised plenty of questions. For those nearing retirement, knowing how the new federal pay scale affects your salary, benefits, and ultimately your retirement income is critical. This year’s proposed 2% average salary increase may sound modest, but understanding the details—like the 1.7% bump in base pay and the 0.3% local adjustment—could shape your final years on the federal payroll and influence your lifelong annuity. If you’re weighing your future in government service or considering retirement soon, having a grasp on these pay scale changes is more crucial than ever.
At PlanWell, we’ve spent more than 30 years guiding federal employees through thick and thin in the realm of financial planning. With designations like the Chartered Federal Employee Benefits Consultant (ChFEBC), Certified Financial Planner (CFP), and Accredited Investment Fiduciary (AIF), our team is well-equipped to handle the nuances of complex federal benefits. We also employ our proprietary Fed-Expert Financial Blueprint—a methodical system designed to help you evaluate your financial situation and guide your planning with confidence.
Why the 2025 GS PayScale Matters
The General Schedule is the fundamental pay structure for a vast majority of federal employees, from entry-level positions all the way up to supervisory roles. It governs your base pay, step increases, and locality pay. In 2025, the structure takes on added significance because of the proposed salary adjustments, the mix of base versus locality pay, and other key benefit shifts. Even a seemingly small percentage difference in your GS pay can ripple into your Thrift Savings Plan (TSP) contributions, your Federal Employees Retirement System (FERS) annuity, and your cost-of-living adjustment (COLA) once you retire. For federal employees age 55 and up, these seemingly small changes can make a notable impact on your post-retirement quality of life.
The 2025 adjustment arrives in the wake of a 5.2% increase in 2024, making it a markedly smaller raise. Still, the rationale behind this two-part structure is to offer a mix of direct pay increases and support for those living in areas with a higher cost of living. Before you chalk this up as “just another year,” it might be helpful to see how it stacks up against previous and future years.
Overview of 2025 GS Pay Scale Changes
The federal pay raise process typically begins in early spring, with the administration proposing a specific percentage for the upcoming year. In March 2024, the proposal for a 2% raise in 2025 was introduced. By July or August, an alternative pay plan letter usually cements the final figure, with an executive order making it official in late December. As of now, you can expect an overall average increase of 2%, broken down into a 1.7% bump in base pay coupled with 0.3% added to locality pay.
This follows the pattern of local pay area updates that reflect where federal positions see higher cost-of-living demands. In some cases, entire counties shift into a higher-paying region, potentially offering eligible employees a meaningful income boost. Understanding both the base pay increase and the interplay with your locality can help you assess potential changes to your finances.
Understanding the Base Pay Increase
The gs pay 2025 structure includes a 1.7% boost to the base pay rate. This portion applies uniformly across the board, influencing every grade and step within the 2025 gs pay scale. If you’re currently at a higher grade (like GS 15 pay scale 2025), even a small percentage raise can be substantial in dollar terms. Those in mid-level grades—GS 12 pay scale or GS 10—also benefit, though the potential total compensation might hinge on your locality rate.
Base pay also directly affects your future retirement, as your FERS annuity is partly determined by your highest average salary over a set period (often the last three years of service). That means even a modest increase now could elevate your pension down the line, especially if you’re approaching a retirement decision. Watching how each of these factors ties into your “high-3” salary is critical for retirement planning.
Below is a simplified look at how the new gs salary 2025 might show up for selected grades and steps. The figures reflect the 1.7% base increase, not including locality.
|
Grade |
Step 1 |
Step 5 |
Step 10 |
|---|---|---|---|
|
1 |
$22,360 |
$25,336 |
$27,970 |
|
5 |
$34,454 |
$39,046 |
$44,786 |
|
10 |
$57,489 |
$65,153 |
$74,733 |
|
15 |
$125,133 |
$141,817 |
$162,672 |
This table offers a sample of what employees at a few select grades can expect. It also serves as a benchmark to compare your current salary against potential increases. The important takeaway is that even a 1.7% uptick can aid in growing your retirement nest egg over time.
Locality Pay Updates
In addition to the 1.7% base pay hike, there’s a 0.3% average increase earmarked for gs pay scale 2025 with locality. Locality is determined by geographic region, and sometimes even specific counties. If you live in an area like Wyandot County, OH, which is being added to the Columbus locality area, or Yuma County, AZ, which is now part of the Phoenix area, you could see a stronger pay boost than someone in a less affected region.
Locality pay can significantly enhance your overall salary and, similarly to base pay, your retirement calculation includes it. This means your annuity might get a bump if your last few years are spent in a higher locality region. If you’re contemplating a move or have recently transferred departments, make sure to review how these location-based changes might alter your long-term financial picture.
Comparison to Previous and Future Years
It helps to see the opm pay scale 2025 in relation to the pay raises in 2023, 2024, and potentially 2026. Each year’s raise can feel small or large in isolation, but a multi-year view can better illustrate trends:
|
Year |
Pay Raise % |
Notes |
|---|---|---|
|
2023 |
4.6% |
Multiple proposals converged to establish a final figure |
|
2024 |
5.2% |
Largest annual increase under the current administration |
|
2025 |
2.0% |
1.7% base pay and 0.3% locality component |
|
2026 (Proposed) |
4.3% |
FAIR Act proposes further increases but not yet confirmed |
The federal pay scale 2025 clearly marks a drop from 2024’s 5.2%. However, any future changes, such as a potential gs pay scale 2026, will likely hinge on new legislative actions. Being aware of these ongoing discussions could help you align your financial strategies with your retirement goals.
Other Relevant Benefits and Policy Changes
Beyond the gs pay chart 2025, many federal employees face several other critical benefit updates. These changes can create second-order effects on your take-home pay and retirement outlook. Here are a few highlights:
COST-OF-LIVING ADJUSTMENT (COLA): Retirees under FERS can anticipate a 2% COLA in 2025, while those receiving Social Security or under CSRS will see around 2.5%. While COLA doesn’t directly impact those still actively employed, it’s an important piece if you’re planning to retire soon and rely on a FERS or CSRS annuity.
FEHB Premiums: Expect an average premium increase of 13.5% across the Federal Employees Health Benefits Program (2025 FEHB Premium). For some plans, this could be a noticeable jump. The cost might balance partially against the salary increase, so be sure you’re prepared.
Dental and Vision Insurance Under FEDVIP: Dental coverage sees an average hike of about 2.97%, while vision coverage inches up by around 0.87%. Although smaller than the FEHB jump, these increases can still add up, especially if you have multiple family members on these plans.
TSP Contribution Limits: Contribution limits typically rise as inflation and cost-of-living trends continue. Even if the official numbers aren’t yet fully confirmed, it’s wise to prepare for a slightly higher threshold so you can make the most of your tax-advantaged retirement savings. (Learn more about 2025 TSP contribution limits.)
Significance for Nearing-Retirement Employees
The smaller pay raise for gs scale 2025 might at first appear underwhelming, especially if you were counting on a more robust bump before you permanently exit public service. Yet every dollar you earn in the months or years prior to retirement helps boost your “high-3” average salary if you’re under the FERS system. Your final annuity calculation ties closely to that average, so a modest raise can still be beneficial. Small improvements now, combined with strategic TSP contributions, can enhance your total resources in retirement.
Because health care costs can easily outstrip minor pay bumps, consider how you’ll manage the premium increases if you plan to continue with FEHB into retirement. The difference between net gain and net loss can be narrow, so a thorough review of your potential budgets and retirement accounts is encouraged. If you have questions, you might find it beneficial to sign up for one of our free Federal Retirement Planning Workshops for direct guidance on strategies that align with your individual circumstances.
Context and Reactions
Union representatives and advocacy groups have historically pushed for bigger pay increases, especially as reports indicate federal employees still lag behind their private-sector counterparts by a significant percentage. With data suggesting federal employees earn about 24.72% less than private-sector workers in similar roles, it’s no surprise that proposals like the FAIR Act call for higher raises in future years.
As negotiations continue, many federal employees remain concerned about how inflation and rising living costs intersect with their real-world take-home pay. For those who are far from retirement, a few years of incremental raises could still yield salary growth over time. But for those retiring sooner, each annual pay increase leaves a direct impression on lifetime annuity checks.
How PlanWell’s Fed-Expert Financial Blueprint Can Help
With over three decades of hands-on experience helping federal personnel make sense of complex benefit structures, PlanWell is here to support your understanding of the gs payscale 2025. Our planners hold the ChFEBC, CFP, and AIF designations, offering expertise that can help clarify aspects of your federal pay and benefits.
Our Fed-Expert Financial Blueprint is specifically tailored for federal and military employees nearing retirement. We begin by evaluating your GS grade and step, chart your potential transitions as localities change, and forecast how your “high-3” might evolve once a new pay scale goes into effect. We also review how to integrate your TSP contributions, FEHB options, and potential annuity streams for a more comprehensive planning perspective. This focused, personalized approach aims to support you as you approach retirement.
Conclusion & Call to Action
The 2025 gs pay scale may only offer a 2% overall raise, but that fraction of a percentage can still shape your long-term financial trajectory—especially for federal employees approaching retirement. By balancing the 1.7% boost to base pay with 0.3% locality enhancements, the new federal pay scale 2025 continues to evolve in response to economic factors, locality expansions, and legislative pressures. At the same time, increases to health premiums and shifting TSP limits add layers of complexity that can’t be overlooked.
Before deciding on your next career move or finalizing your retirement date, make sure you fully understand how these changes intersect with your unique financial needs. If you want personalized insight, we invite you to sign up for one of our free Federal Retirement Planning Workshops. By gaining clarity on how the 2025 updates and proposed future raises might affect you, you’ll be on track to make informed decisions about your financial future.
