How much is a FERS refund?

It is the deductions taken out of your basic pay, plus interest when the service totals more than a year. The rate turns on when you were first covered: 0.8 percent before 2013, 3.1 percent for the 2013 cohort, and 4.4 percent from 2014 on. Special provision employees pay half a point more, so 1.3, 3.6 or 4.9 percent.

Does OPM pay interest on a FERS refund?

Only if the service covered by the refund totals more than one year. 5 U.S.C. 8401(19)(D) says the lump-sum credit "does not include interest if the service covered thereby aggregates 1 year or less, or for a fractional part of a month." Above a year, interest compounds annually at a rate the Treasury sets each year and OPM publishes. The 2026 rate is 4.25 percent. It was 1.375 percent in 2021 and 13 percent in 1985.

Is a FERS refund taxable?

Your contributions are not, because they came out of pay you had already paid tax on. The interest is. IRS Publication 721: "If the refund includes only your contributions, none of the refund is taxable. If it includes any interest, the interest is taxable unless you roll it over." OPM withholds 20 percent of the interest absent a direct rollover, and separating before the year you turn 55 can add a 10 percent early distribution tax.

Can I pay a FERS refund back later?

Yes, if you were employed under FERS on or after October 28, 2009. 5 U.S.C. 8422(i), added by the National Defense Authorization Act for Fiscal Year 2010, lets you "deposit the amount received, with interest." Before that law there was no way back at all. The deposit has to be paid in full before OPM finalizes your annuity, and a partly paid redeposit is returned with no credit given.

Does the date of my refund decide whether I can redeposit it?

No, and this is the detail most write-ups get wrong. OPM Benefits Administration Letter 11-103 keys eligibility to employment, not to the refund: the provisions "only apply to employees covered under FERS on or after October 28, 2009, and only affect annuities that are based on separations on or after October 28, 2009." A refund you took in 1996 is redepositable if you later held a FERS job on or after that date. A refund from 2008 is not, if you never worked under FERS again.

What happens to the service if I never redeposit it?

It still counts toward whether you are eligible to retire, but it cannot be used to compute how much you get. OPM states both halves plainly in BAL 11-103: the refunded service is creditable for eligibility, but "it cannot be used to compute the amount of the retirement and survivor annuity benefits," and the law "does not allow credit for refunded service with an actuarial reduction." Refunded FERS service also still counts for leave, reduction in force retention, and Thrift Savings Plan vesting.

How is redeposit interest calculated?

From the date you received the refund, compounded annually at the same published variable rates, through December 31 of the year before you pay it off in full. A $10,000 refund received in 2023 and repaid in 2026 picks up interest at 1.875 percent for 2023, 3.75 percent for 2024 and 4.375 percent for 2025, which comes to about $1,032. Waiting while rates are high makes the bill grow faster.

What form do I use, and who do I send it to?

SF 3106 for FERS, with SF 3106A as the notification your current and former spouses must receive. Do not use SF 8202, the CSRS form, because that mix-up delays payment. Separated 30 days or less, send it to your personnel office. Longer than that, send it to OPM. You must be separated at least 31 consecutive days and not annuity-eligible within 31 days of applying.

Calculator

FERS Refund Calculator

What leaving federal service pays back: the retirement deductions taken out of your pay, the interest OPM adds on top, the tax you owe on that interest, and what it would cost to buy the service back later.

Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM BAL 11-103 · Updated October 2026

Taking the refund voids the annuity for that service

5 U.S.C. 8424(a) is blunt: payment of the lump-sum credit "voids all annuity rights" based on the service it covers, until you are reemployed under FERS. The way back is a redeposit with interest, and only if you were employed under FERS on or after October 28, 2009. Price both sides below before you file SF 3106.

Reviewed October 3, 2026 · Sources: 5 U.S.C. 8422 (rates, redeposit), 5 U.S.C. 8424 (refund), OPM BAL 11-103 (rates, redeposit rule), IRS Publication 721 (tax) · Inputs stay in your browser. Nothing you type is sent anywhere.

Average yearly basic pay

Basic pay across the service the refund covers. Locality pay counts. Overtime and awards do not.

Years of service the refund covers

A year or less pays no interest at all under 5 U.S.C. 8401(19)(D).

When were you first covered by FERS

Your deduction rate is 4.4 percent of basic pay. If you were rehired in 2014 or later but already had 5 years of creditable FERS service, you stayed on the older, cheaper rate, so pick that one.

Position type

Service began

You separated

Year OPM paid (or will pay) the refund

Interest runs through the end of the year before payment, so a refund that sits in processing keeps earning.

Buying the service back

I was employed under FERS on or after October 28, 2009This, not the date of the refund, is what decides whether you can buy the service back. A refund taken in 1996 can still be repaid if you held a FERS job on or after that date.

Year you would pay the redeposit in full

Your refund comes to about $20,130: $19,008 of your own deductions plus $1,122 of interest. Buying the service back later would cost $22,822.

Your deductions

$19,008

4.4 percent of pay. Already taxed, so not taxable again.

Interest

$1,122

Compounded yearly at the published Treasury rate

Total refund

$20,130

Before any withholding

Tax on the refund

IRS Publication 721 puts it plainly: if the refund includes only your contributions, none of it is taxable. The interest is taxable in the year you receive it unless you roll it straight into an IRA or another qualified plan. On a refund this size, the taxable part is $1,122, and OPM withholds 20 percent of it, about $224, if you do not elect a direct rollover. Separating before the year you turn 55 can add a 10 percent early distribution tax on the interest.

Redeposit to restore the service

You were employed under FERS on or after October 28, 2009, so 5 U.S.C. 8422(i) lets you repay the refund with interest and restore full credit for that service. The redeposit has to be paid in full before OPM finalizes your annuity, and a partly paid redeposit is returned with no credit given.

Amount received

$20,130

Interest added

$2,692

Total due

$22,822

Deductions for each year are $3,168.00, which is 4.4 percent of $72,000. The running balance then earns the rate OPM published for each following year.

Year by year deductions, published interest rate, interest credited and closing balance
Year	Rate	Deductions	Interest	Balance
2015	none	$3,168.00	none	$3,168.00
2016	2%	$3,168.00	$63.36	$6,399.36
2017	1.875%	$3,168.00	$119.99	$9,687.35
2018	2.125%	$3,168.00	$205.86	$13,061.21
2019	2.75%	$3,168.00	$359.18	$16,588.39
2020	2.25%	$3,168.00	$373.24	$20,129.63

Redeposit interest starts from the date the refund was paid and compounds yearly through the end of the year before you pay it off.

Year by year redeposit interest accrual
Year	Rate	Interest	Owed
2021	1.375%	$276.78	$20,406.41
2022	1.375%	$280.59	$20,687.00
2023	1.875%	$387.88	$21,074.88
2024	3.75%	$790.31	$21,865.19
2025	4.375%	$956.60	$22,821.79

What this models

What the FERS Refund Calculator models and what it does not model
Modeled	Not modeled
The three cohort deduction rates from 5 U.S.C. 8422(a), and the special provision rates	Your actual pay history. One average salary is applied across every year of the service
Interest compounded annually at the rates OPM published for 1948 through 2026	The within-year proration OPM applies to the final partial month before payment
The one-year bar in 8401(19)(D), which zeroes interest on short service	Years past 2026, which carry the 2026 rate forward as a stated assumption
The redeposit rule in 8422(i), keyed to FERS employment on or after October 28, 2009	Whether your separation date also falls on or after that date, which OPM requires as well
Redeposit interest from the refund date through the year before payment in full	Installment payment schedules, which carry their own interest on the unpaid balance
The tax split: contributions already taxed, interest taxable, 20 percent default withholding	Your marginal rate, state tax, and whether the 10 percent early distribution tax applies to you
Civilian FERS deductions only	Military deposits, CSRS deductions in a mixed career, and voluntary contributions

Precision limit: OPM compounds interest annually and prorates the final partial month, which this tool rounds to whole years. Expect the real figure to sit within a few dollars of the estimate on a short refund, and within a fraction of a percent on a long one. Only OPM can compute the binding amount.

The cohort you were hired into changes everything

Three people with identical careers get very different refunds. Someone first covered before 2013 contributed 0.8 percent of basic pay. The 2013 cohort contributed 3.1 percent. Anyone first covered in 2014 or later contributes 4.4 percent, which is five and a half times the oldest rate for exactly the same pension.

A 2014 hire leaving after five years at $80,000 gets about $17,600 of their own money back, against $3,200 for a pre-2013 hire in the same job. The newer employee has more cash on the table and a weaker reason to keep the service.

The one-year rule is a real cliff

Interest is not prorated for short service. It is switched off. The statute bars interest when the covered service "aggregates 1 year or less," so a refund for exactly twelve months of work earns nothing, and a refund for thirteen months earns interest on the whole balance. If you are close to the line and the refund has not been filed, the arithmetic favours waiting.

Why the October 2009 date matters more than your refund date

Until the Fiscal Year 2010 defense authorization act, a refunded FERS period was gone for good. The two Handbook chapters that still say so, chapters 21 and 32, both date from 1998 and are superseded on this point. What replaced them is narrower than people assume: the test is whether you held a FERS job on or after October 28, 2009, not when the refund was issued.

That flips the usual advice. A mid-1990s refund is redepositable for anyone who came back to federal service in the last fifteen years. A 2008 refund is not, if the person never returned. The checkbox on this page asks it the way OPM does.