The 2027 Raise Feds Didn't Get: $1,223 to $4,440 by Grade

Last Updated: September 13, 2026 Reading Time: 8 min

Every federal pay story this fall leads with the number you got: 0%. This one is about the number the law says you should have gotten, and what it was worth in dollars at your grade.

The Federal Employees Pay Comparability Act of 1990 contains a formula. For 2027, that formula produced a 3.1% across-the-board raise. The same White House letter that froze your pay also priced the locality side of the formula at an average 20.6% increase. Neither number will show up on a pay stub in January. Here is what each one was worth.

What the Pay Law Actually Says You Were Owed

FEPCA set up a two-part formula for General Schedule raises. The first part, under 5 U.S.C. 5303, is an across-the-board increase tied to the Employment Cost Index. It takes private-industry wage and salary growth for the 12 months ending the previous September and subtracts 0.5 percentage points.

For 2027 the relevant reading is the BLS Employment Cost Index for September 2025: private-industry wages and salaries up 3.6%. Subtract the half point and the formula says 3.1%.

The second part is locality pay under 5 U.S.C. 5304. It is designed to close the gap between federal and private-sector pay in each metropolitan area, measured by the Federal Salary Council. That gap has never been closed. Every president since 1994 has used the alternative pay plan authority in 5 U.S.C. 5303(b) to substitute a smaller number, citing "national emergency or serious economic conditions."

The August 26, 2026 letter, House Document 119-189, does the same thing, and it puts a price on what it is overriding. In the letter's words, without the alternative plan "locality pay for the civilian workforce would automatically increase by an average of 20.6 percent, costing $26 billion in the first year alone."

So the two numbers the law would have paid are 3.1% on base and an average 20.6 percentage points more locality. The letter set the first to 0% and the second to no change.

The Forgone 3.1%, Grade by Grade

This first table is the precise part. It is the 2027 across-the-board raise the formula produced, applied to 2026 base pay at Step 5. Because it is a base-pay figure, it is the same in every locality.

These are annual figures on base pay only. Because locality pay is a percentage of base, the actual paycheck effect of a 3.1% base raise is larger: a GS-13 in DC would have seen roughly $3,195 × 1.3394, or about $4,279, before the locality side of the formula even enters the picture.

A GS-9 in year two of a career ladder gave up $1,853. A GS-13 gave up $3,195. Over a 30-year career the base-pay effect compounds, because every future raise, step, and High-3 average would have been computed from the higher number.

The Forgone Locality Catch-Up (Illustrative)

This second table is different in kind, and it needs a caveat up front.

The letter gives one national average, 20.6%, for how much locality pay "would automatically increase." It does not publish the area-by-area targets. The Federal Salary Council's actual figures vary widely by city, and the council's most recent published gap, from its November 2024 report, was 24.72% nationally on a different measure. The 20.6% in the letter almost certainly reflects the November 2025 cycle.

To show the scale, the table below adds 20.6 percentage points to each area's current locality rate and applies the 3.1% base raise underneath it. The letter's phrase, "increase by an average of 20.6 percent," can also be read as a 20.6% rise in the locality payment itself (DC's 33.94% becoming about 40.9%), which would make the forgone amounts roughly a third of those shown. This is an illustration of one reading of the letter's own number, not a per-locality computation. Treat the dollar figures as directional and as an upper bound.

Worked example, GS-13 Step 5, DC:

• 2026 base: $103,049. With the 3.1% formula raise: $103,049 × 1.031 = $106,244.
• 2027 frozen total pay (same as 2026): $103,049 × 1.3394 = $138,024.
• Illustrative full-formula total pay: $106,244 × 1.5454 = $164,190.
• Forgone amount: $164,190 minus $138,024 = $26,165.

The figures look implausibly large for a single year. That is the point the letter itself makes when it cites $26 billion for the first year. FEPCA's locality mechanism was written to close the gap in one step, and the size of that step is exactly why no administration has taken it. Our FEPCA explainer covers the 31-year history of the override.

Methodology note. Inputs: 2026 GS base pay (Step 5) and 2026 locality percentages from the FedTools gs-pay-2026 data file, which mirrors the OPM tables; the 3.6% ECI reading from BLS; the 20.6% figure quoted from the letter. Forgone amount = base × 1.031 × (1 + locality + 0.206) minus base × (1 + locality), rounded once at the end. Recompute any cell with those two products.

Why the Two Numbers Are Not the Same Story

It is easy to run the forgone raise and the real pay cut together. They measure different things.

The real 2027 pay cut is inflation. With the August CPI-U at 3.4% and the raise at 0%, your paycheck buys 3.4% less. A GS-13 Step 5 in DC loses about $4,693 of purchasing power.

The forgone raise is a policy choice. The formula said 3.1% on base; the letter said 0%. The formula said close the locality gap; the letter said do not. For the same GS-13 in DC, the base piece alone is $3,195 on base pay, or about $4,279 in the paycheck once locality is applied.

Add them and you get a rough picture of the 2027 distance between what the law contemplated and what your bank account will see. But they should be reported separately, because one is set by the Bureau of Labor Statistics and the other by the White House.

Where the FAIR Act Fits

Federal employee unions are not asking for the full formula. The FAIR Act, H.R. 7480 and S. 3823, proposes 4.1% for 2027: 3.1% base and 1.0% locality. It was introduced in February 2026 and has not moved since.

The 4.1% splits in a telling way. The 3.1% base piece is exactly the formula number. The 1.0% locality piece is a fraction of the 20.6% the letter cites. The FAIR Act is a negotiated ask, calibrated to be passable, not a demand that the statute be followed. Our FAIR Act analysis compares its terms to prior years' proposals and outcomes.

The realistic path for any 2027 raise runs through the FY2027 Financial Services and General Government appropriations bill. In 2019 that bill turned a proposed freeze into 1.9%. The current continuing resolution funds the government through December 11, 2026, so that bill, or the next stopgap, is the deadline that matters. Nothing on this front has advanced as of mid-September.

What the Forgone Raise Means for Your Retirement Math

A raise you did not get in 2027 also does not enter your High-3 average, does not raise the base for your 2028 step increase, and does not increase your agency's TSP match.

For a GS-13 Step 5 in DC, the 3.1% base piece was worth about $4,279 in the paycheck. Over three years inside a High-3 window, that is roughly $4,279 of High-3, which at 30 years of service and the 1.0% multiplier is about $1,284 a year in annuity for life. The High-3 Calculator will run your own window with and without a 2027 increase.

None of that changes the pension you have already earned. It changes the growth you would have had.

Calculate What the Formula Would Have Paid You

Use the free GS Pay Calculator to pull your 2026 base pay for your grade and step. Multiply the base by 0.031 for the forgone across-the-board piece, then by your locality multiplier to see the paycheck effect. To see how your grade and locality compare with agency and occupation averages, use the Federal Salary Explorer.

Frequently Asked Questions

What raise would federal employees have gotten without the alternative pay plan?

Under the statutory formula in 5 U.S.C. 5303, the 2027 across-the-board raise would have been 3.1%: private-industry wage growth of 3.6% for the year ending September 2025, minus the 0.5-point offset the law builds in. On top of that, the White House letter says locality pay would have risen by an average of 20.6% if the alternative plan had not been submitted.

How much money is the forgone 2027 raise per grade?

The 3.1% base-pay piece alone is worth $1,223 a year at GS-5 Step 5 and $4,440 a year at GS-15 Step 5, and it does not depend on where you work. Adding the locality piece, using the letter's 20.6% average as an illustration, pushes the total to roughly $15,000 at GS-9 and $26,000 at GS-13. Those larger figures show how big a one-year catch-up under the full law would be, not what any single city would actually have received.

Why is the locality number so much bigger than the base-pay number?

The base-pay formula tracks one year of private-sector wage growth. The locality formula is designed to close a federal-versus-private pay gap that has compounded for more than three decades. That is also why no administration has implemented it at full strength since the law passed in 1990.

Is the 20.6% figure the same in every city?

No. The letter states one national average. The actual target for each locality would come from the Federal Salary Council's area-by-area pay-gap data, which the letter does not publish. This article applies the average uniformly to show the scale, so treat the locality dollar figures as directional rather than exact.

Could Congress still deliver this raise?

In theory, through the FY2027 Financial Services and General Government appropriations bill, which has to be resolved alongside the rest of government funding by December 11, 2026. As of mid-September 2026, no appropriations language restoring the formula has advanced in either chamber.

Does law enforcement get the formula raise instead of the freeze?

No. The 3.8% for law enforcement personnel is a separate carve-out written into the same letter. It is not the formula amount, which would have been 3.1% across the board plus locality adjustments.

How is this different from the FAIR Act's 4.1%?

The FAIR Act proposes a flat 4.1%, split 3.1% base and 1.0% locality, a number chosen to be passable. The formula already in the law would pay the same 3.1% base plus a locality catch-up the White House itself priced at 20.6% on average. The FAIR Act is what the unions are asking for. The formula is what the statute already says.

Related Resources

• GS Pay Calculator: Your 2026 base and locality pay, which the freeze carries into 2027.
• The Real 2027 Pay Cut: The inflation side of the same story, computed by grade.
• FEPCA Explained: The formula, the override authority, and 31 years of alternative plans.
• 2027 FAIR Act Proposal: The 4.1% bill and how it compares to past asks.
• 2027 Pay Tables Tracker: Live status of the 2027 tables and the December executive order.
• Law Enforcement 3.8% Raise: Who is covered by the carve-out.

Sources: Alternative Pay Plan Letter, House Document 119-189 (govinfo.gov) · 5 U.S.C. 5303 (Cornell LII) · BLS Employment Cost Index, September 2025 release · OPM 2026 General Schedule salary tables · FedTools 2026 GS pay data file.