2027 Federal Pay Freeze: How Are 2027 GS Pay Scales with Locality Calculated?

Will the GS Pay Scales Increase in 2027?

Not for most Civilian Federal Employees.

On August 26, 2026, President Trump officially submitted an alternative pay plan. This proposal includes a pay freeze on both base and locality pay for most Civilian Federal Employees. The proposal cited fiscal responsibility and economic conditions.

The planned pay freeze does make an exception for Federal law enforcement, proposing a 3.8% raise starting in January, as well as service members, with a 5-7% raise for active military and 3.6% pay increase for other uniformed service members.

The Office of Personnel Management (OPM) will determine which law enforcement positions are eligible for the 3.8% raise next year.

Federal employees received a 1% base pay raise in 2026, after an initial proposed pay raise, but no locality pay raise.

Changes to the GS Pay Scales in 2027 

The proposed pay freeze would also leave locality pay unchanged from 2026. There are currently 53 locality pay areas.

How Are GS Pay Scales Calculated?

The United States Office of Personnel Management (OPM) uses three factors to calculate GS pay scales. This system applies to most Civilian Feds under the General Schedule, excluding those covered by Executive and Senior Level Pay Tables. 

Factor 1: GS Pay Grade

The GS Pay Grade system includes 15 categories of pay ranges. GS-1 is the lowest, and GS-15 is the highest. Jobs are assigned a grade based on the level of responsibility, qualifications, and experience. For example, a position that requires a high school diploma but no experience in that field may be a GS-2 position. A position that requires a master’s degree is usually a GS-9. 

Factor 2: GS Pay Step System 

The GS Pay Step system divides each pay grade into 10 steps. Each step is worth about 3% of the employee’s salary, so the higher the step, the higher the salary. Promotions and seniority-based milestones lead to higher steps. In general, it takes 18 years to move from the lowest to the highest step within a single grade.  

Factor 3: Locality 

Locality relates to the region where the employee works. This factor adjusts the base rate of pay for the cost of living in a geographic area. While each position is assigned to a specific grade, and each employee is assigned to a step within that grade, the pay rate will vary by location. This ensures fair compensation in high-cost areas like California or major metropolitan areas. 

While the system may seem complicated, these three factors help address the most fundamental questions involved in compensating a workforce: 

• The differences between positions in terms of responsibilities, difficulties, requirements, etc.
• The need to compensate long-term workers for their service. 
• The cost-of-living differences when the workforce is located all over the country. 

How Is the Locality Adjustment Calculated? 

Of the three determining factors, locality adjustments can be the most complicated to predict. The amount of the adjustment is calculated as a percentage rate based on data from the United States Bureau of Labor Statistics Annual National Compensation Survey. This tool gathers data on compensation from government and non-government sectors in locations all over the country. This information is then compared to the base pay of federal employees in similar positions to calculate the locality pay adjustment factor. 

The Office of Management and Budget (OMB) defines 53 locality areas that OPM uses in setting locality adjustments for all 50 states and all United States territories and possessions. OMB uses defined Metropolitan Statistical Areas and Combined Statistical Areas for this purpose. Hawaii and Alaska have their own pay scales, and 51 other locality areas center on major metropolitan areas. Locations inside the continental United States that don’t fall into an established locality area are grouped as “Rest of United States.” 

Year over year, OPM recommends changes as needed. The President recommends wholesale adjustments to the pay scales, and they are then approved by Congress each year. Federal employees working abroad are not eligible for locality pay adjustments. 

How Can I Use the Locality Pay Adjustment Factor Information? 

Civilian Feds often earn more because of the locality pay adjustment factor. You can find the adjustment rate for your locality by visiting the locality area pay definitions published by OPM. This tool is also useful if you’re considering applying for a similar position in a different part of the country; you can estimate how much higher or lower the pay might be in a new location. 

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