Last Updated: September 9, 2026 Reading Time: 8 min

The Federal Wage System pays about 170,000 federal employees, and it does not work like the GS scale most federal pay coverage assumes. There is no national WG table. Your rate comes from a wage survey in your own metro area, your steps are percentages of the local market wage, and your raise lands on your wage area's date, not January 1. Here is how the system works, and a comparison that surprises most GS employees: in four cities we checked, a WG-10 out-earns a GS-7.

Who Is Paid Under the Federal Wage System

The Federal Wage System covers trade, craft, and labor positions: electricians, machinists, pipefitters, aircraft mechanics, heavy-equipment operators, and the supervisors who lead them. The authority is 5 U.S.C. 5341 through 5349 and 5 CFR Part 532. As of September 2024 the workforce was a little over 170,000 people, down about 12% since 2005. Roughly 70% work for DoD, mostly at depots, shipyards, and installations. About 33,000 work for VA and around 5,000 for the National Park Service.

Three schedules make up the system:

Schedule Who Grades Steps
WG (Wage Grade) Nonsupervisory workers 15 5
WL (Wage Leader) Working leaders who direct other WG employees 15 5
WS (Wage Supervisor) Supervisors 19 5

Postal employees are not FWS. Neither are GS employees in the same shop, which is where most of the confusion starts.

How the Federal Wage System Sets Pay: Surveys, Not Tables

The GS system starts with one national base table and adds a locality percentage. The Federal Wage System has no national table. OPM defines 130 appropriated-fund wage areas (and 118 nonappropriated-fund areas), and DoD, as the lead agency, surveys private-sector employers in each one every year. The survey result becomes the payline for that area.

Step 2 of every grade is the payline, the local prevailing rate. The other steps are fixed percentages of it:

Step Percent of the prevailing rate
1 96%
2 100%
3 104%
4 108%
5 112%

That is a different logic from GS, where each step is a fixed dollar increment of a national base. A WG step raise is 4% of the local market wage, every time.

The DoD Wage Committee approves each area's new schedule on that area's own timeline. That decoupling from the GS calendar is why, in July 2025, GovExec reported that more than 60,000 FWS employees across 87 wage areas were still waiting on their 2025 raise while GS employees had received theirs in January. It is also why no standing rule caps FWS increases at the GS percentage. Individual years' pay legislation has sometimes tied the two, and sometimes not.

Step Increases and How Long They Take

Under the FWS Operating Manual, an employee with a satisfactory or better rating advances:

From To Waiting period
Step 1 Step 2 26 weeks
Step 2 Step 3 78 weeks
Step 3 Step 4 104 weeks
Step 4 Step 5 104 weeks

That is six years to reach step 5 from step 1 without a promotion. Compare GS, where a step 1 employee takes 18 years to reach step 10.

Four Wage Areas, Three Grades

We pulled the current schedules directly from the Defense Civilian Personnel Advisory Service site and annualized the hourly rates at 2,087 hours.

Wage area Schedule and effective date WG-5 step 3 WG-8 step 3 WG-10 step 3
Washington-Baltimore-Arlington, DC AC-027R, Oct. 19, 2025 $26.55/hr, $55,411/yr $33.69/hr, $70,311/yr $37.63/hr, $78,534/yr
Virginia Beach-Chesapeake, VA 340R special-rate memo, July 12, 2026 $26.55/hr, $55,411/yr $34.23/hr, $71,438/yr $39.34/hr, $82,103/yr
San Diego, CA AC-017R, Nov. 17, 2024 $25.03/hr, $52,238/yr $30.50/hr, $63,654/yr $34.19/hr, $71,355/yr
Harrisburg-York-Lebanon, PA AC-714R, Mar. 22, 2026 $23.75/hr, $49,566/yr $28.32/hr, $59,104/yr $31.27/hr, $65,260/yr

FedTools 2026 analysis of DCPAS wage schedules. The Virginia Beach figures come from a special-rate memo issued under 5 CFR 532.801 to correct pay inversion and enforce the $15 floor; it covers the full grade range and is the operative schedule. The San Diego schedule is the oldest in the table and should be rechecked when a newer one posts.

Look at the first row. WG-5 step 3 pays exactly $26.55 an hour in both Washington and Virginia Beach. On the GS side, Washington's locality rate is 33.94% and Virginia Beach's is 18.80%. The two systems price the same city independently, and a GS employee's locality percentage says nothing about what the WG employee at the next bench earns.

WG-10 vs. GS-7 in the Same City

A WG-10 is a journeyman-level trade grade: an electrician, a machinist, an HVAC mechanic. A GS-7 is a common entry point for degree-holding administrative and technical work. Here is what each makes at step 5 in the same metro, using the 2026 GS table and locality rates from our GS data.

Locality GS-7 step 5 (2026, with locality) WG-10 step 5 (annualized) Gap WG-10 premium
Washington-Baltimore-Arlington, DC (33.94%) $65,437 $84,629 +$19,192 29.3%
Virginia Beach-Norfolk, VA-NC (18.80%) $58,039 $88,426 +$30,387 52.4%
San Diego, CA (33.72%) $65,326 $76,844 +$11,518 17.6%
Harrisburg-Lebanon, PA (19.43%) $58,346 $70,247 +$11,901 20.4%

FedTools 2026 analysis. GS-7 step 5 base is $48,854; WG-10 step 5 hourly rates are $40.55 (DC), $42.37 (Virginia Beach), $36.82 (San Diego), and $33.66 (Harrisburg) from the schedules above.

The gap is widest in Virginia Beach, a Navy-shipyard wage area where the private-sector trades market DoD surveys is strong and the GS locality rate is modest. It is narrowest in San Diego, where GS locality is high and the surveyed schedule is older. In every case the skilled-trade grade wins. Whether a GS employee "out-earns" a wage-grade coworker depends entirely on the two grades and the city, and the assumption usually runs the wrong way.

Differentials, Premiums, and Overtime

FWS employees have their own premium-pay rules, and several differ from GS.

Night shift differential. 7.5% of the basic rate for a regularly scheduled shift where most hours fall between 3 p.m. and midnight; 10% where most fall between 11 p.m. and 8 a.m. It is paid on the whole shift, and it continues during paid leave. OPM's FWS night differential fact sheet has the schedule rules.

Environmental differential. Hazard pay for FWS is a percentage set by hazard category in Appendix J of the Operating Manual, applied to the wage area's WG-10 step 2 rate, and paid on top of base pay for the hours exposed. The rate is tied to WG-10 step 2 regardless of the employee's own grade.

Sunday premium. 25% of basic pay for non-overtime hours in a regularly scheduled tour that includes Sunday, under 5 U.S.C. 5546.

Overtime. Most FWS employees are FLSA non-exempt. Overtime for hours beyond 8 in a day or 40 in a week is paid under 5 U.S.C. 5542 and the FLSA in parallel, at time and a half of the basic rate including any night differential.

How to Find and Read Your Wage Schedule

The schedules are published by DCPAS at wageandsalary.dcpas.osd.mil, organized by wage area number. Each appropriated-fund schedule PDF lists WG, WL, and WS grades down the left and steps 1 through 5 across, with hourly rates and the effective date at the top. The wage area number appears on your SF-50 and on the schedule.

To annualize an hourly rate, multiply by 2,087. To compare against a GS salary in the same city, run the grade and step through the GS Pay Calculator and use the same locality. To see what either number is after taxes and retirement deductions, the Federal Take-Home Pay Calculator accepts any annual salary.

The 2027 Freeze Question

The pay-plan letter transmitted August 26 freezes GS base and locality rates for 2027 and gives law enforcement 3.8%. It does not mention the Federal Wage System, and no source we found states whether FWS schedules are included. Historically, some pay freezes have been extended to prevailing-rate employees through appropriations language, and some FWS areas have received survey-based increases in GS freeze years. Until OPM's December guidance and the FY2027 appropriations text settle it, FWS treatment for 2027 is an open question. Our 2027 freeze by GS grade piece covers the GS side.

Compare Your Pay in Any Locality

Use our free GS Pay Calculator to see what a GS grade and step pays in your wage area's city, then set it against your WG schedule. Run the comparison →

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