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2026 Federal Pay Raise Announced!
Sep 1, 2025
President Trump made a surprising announcement for the 2026 pay raise for federal employees. Watch to find out what you can expect your pay increase to be next year! Related Articles Trump Defies Expectations, Grants 2026 Federal Pay Raise https://www.fedsmith.com/2025/09/01/trump-defies-expectations-grants-2026-federal-pay-raise/ What is the Difference Between the COLA and Pay Raise? https://www.fedsmith.com/2024/10/16/difference-between-cola-and-pay-raise/ Chapters 0:00 Introduction 0:14 Surprise in 2026 0:58 Details of the Pay Raise 2:28 Not a Unique Surprise from the President 3:31 Significance of the Alternative Pay Plan Letter 5:29 Pay Raise and COLA Are Not the Same Thing 6:22 Conclusion
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0:00
Breaking news. Federal employees were
0:02
bracing for a pay freeze in 2026, but a
0:05
surprise has come out of the White
0:07
House. I'm going to tell you about it.
0:09
Hey everyone, Ian Smith here with
0:11
fedsmith.com. Thank you for joining me
0:13
today. So, what is this big pay raise
0:16
news? Well, it looks like most federal
0:19
employees are now going to be getting a
0:21
pay raise in 2026 after expectations
0:24
were that there would be no raise. Now,
0:26
why do I say that? It's because back in
0:29
the fall or excuse me, back in the
0:31
spring, the White House budget proposal
0:35
uh was silent on the issue of a pay
0:37
raise for federal employees. It did
0:39
however propose a 3.8% raise for
0:43
military personnel. And so the
0:45
assumption was that because it was
0:48
silent on it and because Congress didn't
0:50
take any action so far this year to
0:52
authorize a pay raise for federal
0:54
employees in legislation that there
0:56
would be no pay raise next year. We find
0:59
out more in August though when the
1:01
president issues his alternative pay
1:03
plan letter and that has happened and it
1:06
is a surprise as I said because instead
1:09
of the assumed pay freeze for next year,
1:12
President Trump has authorized a 1%
1:15
across the board raise for most federal
1:18
employees.
1:20
Also in the letter he spells out um no
1:24
pay increase for locality pay. So,
1:26
locality pay rates would stay flat next
1:28
year. And there's also a surprise
1:31
announcement in this letter as well. Um,
1:33
the president has proposed a higher
1:37
raise for certain federal employees,
1:40
specifically law enforcement personnel.
1:42
And in the letter, the president states,
1:45
quote, "Separately, to increase
1:48
recruitment and retention in critical
1:49
law enforcement roles and to ensure our
1:51
great federal law enforcement officers
1:53
are treated fairly, in addition to the
1:56
1% base pay increase, at my direction,
1:59
the Office of Personnel Management shall
2:01
use its statutory authority to increase
2:04
2026 compensation for certain categories
2:07
of law enforcement personnel by an
2:09
additional amount to be in line with the
2:11
3.8% 8% increase being given to mil
2:15
military personnel.
2:17
So that's referencing what I mentioned
2:19
was in the White House budget proposal
2:21
back in the spring that the White House
2:23
was recommending a 3.8% raise for active
2:27
duty military members. Now, this is not
2:30
the first time that the president has
2:32
surprised federal employees with his
2:34
alternative pay plan letter. back in
2:37
2020, for instance, with or with the
2:39
2020 pay raise, um he had initially
2:42
proposed a pay freeze for that year's
2:45
pay raise, but then he wound up
2:47
proposing a 2.6% pay raise in his
2:50
alternative pay plan letter. Um, that
2:53
letter also proposed no increase for
2:55
locality pay, but then when the pay
2:58
raise was finalized, it actually ended
3:01
up being 3.1%
3:03
overall average raise because it
3:04
included an additional half a percent
3:06
for locality pay. So, point being,
3:09
things could still change. This is what
3:11
the president's proposing. Congress
3:13
could do something different, but this
3:15
will all be finalized in December when
3:18
the president issues an executive order
3:20
finalizing the pay raise and then the
3:22
office of personnel management at that
3:24
point can issue uh the pay tables for
3:27
the coming year and at that point the
3:29
raise will be completely final and we'll
3:31
have all the numbers. So what's the
3:32
significance of this alternative pay
3:34
plan letter? Well, issuing the the
3:37
letter is a required step in the annual
3:41
process each year for determining the
3:42
pay raise for federal employees. And
3:45
it's part of FEPA, FECA,
3:49
and that stands for the Federal Employee
3:51
Pay Comparability Act of 1990. And under
3:54
that law, the president can set the pay
3:57
raise for the federal workforce for
4:00
quote national emergency or serious
4:02
economic conditions affecting the
4:05
general welfare. If he does not issue
4:08
this letter in any given year, and the
4:10
deadline is the end of August, so that's
4:12
why it usually comes out in August, then
4:15
an automatic raise will kick in that's
4:17
much higher. And that has never happened
4:20
under FEPA um since it's been in effect
4:23
since 1990. In fact, in his letter this
4:26
year, the president cited this provision
4:29
and he noted that the pay raise would be
4:32
approximately almost 19%
4:35
if he didn't set the alternative pay
4:37
plan. He wrote in the letter, quote,
4:40
without this alternative pay plan, under
4:42
current law, locality pay would increase
4:44
an average of 18.88% 88% costing 24
4:48
billion in the first year alone. This
4:50
change would go into effect in January
4:52
2026 along with an additional 3.3%
4:56
across the board increase for the base
4:58
general schedule. And then the president
5:00
noted later in the the letter that it's
5:03
important to be fiscally responsible. He
5:05
wrote, quote, we must maintain efforts
5:07
to put our nation on a fiscally
5:09
sustainable course. Federal agency
5:11
budgets cannot sustain such
5:12
irresponsible increases. And again,
5:15
that's referring to that that large
5:17
almost 19% pay increase that would kick
5:19
in if he did not issue the alternative
5:21
pay plan letter. Accordingly, I've
5:24
determined that it is appropriate to
5:25
exercise my authority to set alternative
5:28
pay adjustments for 2026. And one last
5:30
point I'll leave leave you with. There's
5:33
sometimes confusion surrounding um the
5:36
annual pay raise and the cola for
5:39
retired federal employees. Sometimes
5:41
people will use the terms
5:42
interchangeably. They'll talk about the
5:44
COLA this year for the federal
5:46
workforce. The terms are actually not
5:48
the same. COLA stands for cost of living
5:50
adjustment and that only applies to
5:52
retired federal employees. It's
5:54
determined by an automatic formula each
5:57
year based on the um the CPI, the
6:00
consumer price index. And so retired
6:03
federal employees won't know what their
6:06
annuity increase is until October.
6:09
That's when that information comes out.
6:11
So, this pay raise only applies to
6:13
current federal employees, primarily
6:16
under the general schedule. I'll leave a
6:17
link in the description to an article
6:19
that goes into more details on this
6:21
subject.
6:23
So, this is good news for federal
6:25
employees because again, the expectation
6:28
was that there was not going to be a pay
6:30
raise for federal employees in 2026.
6:33
And the president is saying that he does
6:36
in fact want to give the federal
6:38
workforce a pay increase next year.
6:41
Thank you for watching today. Hope you
6:43
found this video helpful. Please like
6:45
and subscribe for additional updates as
6:48
they become available. And also be sure
6:50
to check out the fedsmith.com website
6:52
because we have a lot of news articles
6:55
there. There's an article on this
6:57
subject that goes into more detail.
6:59
We'll be posting more information as
7:01
well about the pay raise as again as it
7:04
becomes available. Thank you for
7:05
watching and have a good day.
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