I How the calculation works
The arithmetic is simple and worth internalizing, because it explains several things that otherwise look strange.
The formula
Total pay = base rate × (1 + locality percentage)
A GS-12 Step 5 has a 2026 base rate of $86,659. In the Washington-Baltimore area at 33.94 percent: $86,659 × 1.3394 = $116,071.
Two consequences follow directly from locality being a percentage rather than a flat amount:
- The gap widens with grade. A GS-15 in a high-locality area is separated from a Rest of U.S. counterpart by far more dollars than a GS-5 is, because the same percentage applies to a larger base.
- A base-pay raise is amplified by locality. The 1 percent 2026 base increase produced slightly more dollars in San Jose than in a Rest of U.S. area, without any locality change at all.
Locality is a percentage applied to a national base table according to where your job is officially located — which makes your duty station, not your address and not your cost of living, the thing that determines your pay.
II Why it is not a cost-of-living adjustment
This is the most common misconception about federal pay, and correcting it changes how you read the numbers.
Locality rates are determined by comparisons of local private-sector salary rates for comparable work — not by the cost of living in an area. The system exists to keep federal pay competitive with what local employers pay for similar jobs, which is a labor-market question rather than a price-level question.
The practical implications:
- An area with expensive housing but a thin professional labor market may have a modest locality rate.
- An area with moderate living costs but intense competition for technical talent may have a high one.
- Your buying power can be higher in a lower-locality area than in a higher one.
The locality percentage tells you about the local labor market for your occupation. It does not tell you what your money will buy. A GS-13 moving from Rest of U.S. to Washington-Baltimore gains roughly 14 percent in nominal pay and may lose ground in real terms after housing. Run the actual comparison — the locality figure is an input to that analysis, not the answer.
III The duty station rule
One sentence governs more unexpected pay changes than anything else in the system: locality pay is tied to your official duty station, not your home address.
| Situation | Which locality applies |
|---|---|
| Live in a low-locality area, commute to a high-locality office | The office rate |
| Live in an expensive city, duty station recorded elsewhere | The elsewhere rate |
| Fully remote, duty station changed to your home | Your home area rate |
| Telework from home, duty station still the office | The office rate |
| Detailed temporarily to another area | Generally your permanent duty station rate |
Your duty station is recorded on your SF-50. If you are unsure which locality you are being paid, that is where to look — and it is worth checking after any reassignment, office move, or telework agreement, because the field can change without anyone pointing it out. Reading SF-50s is covered in Topic 12.
IV What happened in 2026
The 2026 adjustment split in an unusual way.
| Component | 2026 |
|---|---|
| General Schedule base rates | +1.0% across the board |
| Locality percentages | Frozen at 2025 levels |
| Law enforcement officers under specific authorities | +3.8% |
| Executive Schedule Level IV cap | $197,200 |
| Effective date | First pay period on or after Jan 1 — January 11 for most agencies |
The freeze was set by executive order under the alternative pay plan authority, signed August 28, 2025. That authority is the same mechanism every president since 1994 has used to override the full FEPCA formula — see Topic 06.
Because locality is applied as a percentage of base pay, a 1 percent base increase with frozen percentages still delivers roughly 1 percent more in every area. Nobody's pay fell. What did not happen is any rebalancing between areas — an area whose private-sector market moved sharply in 2025 did not gain ground, and the spread between the highest and lowest areas is unchanged.
V The areas, and where the money is
There are 58 locality pay areas: 57 named geographic areas plus Rest of U.S., which covers every duty station outside a named area.
| Area | 2026 rate |
|---|---|
| San Jose–San Francisco | 46.34% |
| New York | 37.95% |
| Los Angeles | 36.47% |
| Washington–Baltimore–Arlington (DCB) | 33.94% |
| Phoenix | 22.45% |
| Richmond | 22.28% |
| Huntsville | 21.91% |
| Rest of U.S. | 17.06% |
Two things stand out. Washington-Baltimore is fourth, not first — a persistent surprise for people who assume the capital tops the scale. And the DCB area is geographically enormous, covering 55 counties and cities across five states including parts of West Virginia and Pennsylvania, which means a duty station well outside the metro core can still draw the DC rate.
Rest of U.S. is the floor. No federal employee receives base pay alone — every duty station falls into some area, and 17.06 percent is the minimum.
VI Locality Comparison Calculator
Compare what the same grade and step pays across two areas, and see what a move would actually change.
What does geography cost you?
Uses 2026 base rates and locality percentages. The pay cap is applied where it binds.
What a GS-13 Step 5 Earns Across Locality Areas
Total 2026 salary for a GS-13 Step 5 at a $103,082 base rate, by locality area. Identical grade, identical step, identical work — the entire spread is geography, and it is set by local private-sector wages rather than local prices.
VII The cap and its compressing effect
Total pay including locality is capped at the rate for Level IV of the Executive Schedule — $197,200 in 2026, under 5 U.S.C. 5304(g)(1).
Where the cap binds, it produces an effect that runs against the whole point of the system:
- A GS-15 near the top of the scale in San Jose–San Francisco is capped.
- A GS-15 at the same step in New York may also be capped.
- They earn identical salaries, despite a 8-point difference in nominal locality.
Once you are capped, further locality increases produce nothing. The geographic differential the system exists to create disappears entirely at the top of the scale, and two employees whose local labor markets are genuinely different are paid the same. It also means a promotion into a capped position can deliver far less than the grade difference suggests — worth checking before assuming a GS-15 move pays what the table implies.
The cap also interacts with retirement: capped pay is still your basic pay for High-3 purposes, so the compression carries into your annuity. See Topic 35.
VIII Remote work and telework
This is where the duty station rule turns into money, and where employees have been caught out.
Telework — you work from home some days but your official duty station remains the office. Your locality does not change. Reporting at the office at least twice per pay period has generally been the standard for keeping an office duty station.
Approved fully remote — your official duty station may be changed to your home location, and your locality changes with it.
What a remote conversion can cost
A GS-13 Step 5 in the Washington-Baltimore area earns $103,082 × 1.3394 = $138,068.
Approved as fully remote from a home in a Rest of U.S. location, the duty station changes and the rate becomes $103,082 × 1.1706 = $120,668.
Get the treatment in writing before agreeing. This is processed as a pay action, not as a schedule change, and it is easier to raise before signing than after. Full telework mechanics are in Topic 21, and duty station changes in Topic 22.
IX SES and other systems
The Senior Executive Service does not receive locality pay. SES pay is set within a single nationwide band — $151,661 to $228,000 for 2026 — and the same band applies everywhere.
A GS-15 near the top of the Washington-Baltimore scale is drawing a large locality component that vanishes on entry to the SES. Depending on where in the band the appointment is set, the move can be a smaller raise than expected or close to lateral. That is not an argument against the SES — the trajectory, scope, and later earnings potential are different — but it is worth modeling rather than assuming a grade jump means a pay jump. See Professional Development Topic 14.
Other systems differ too. Federal Wage System employees are paid on locality wage schedules built from local prevailing rates rather than GS locality percentages, and several excepted-service systems have their own structures.
X What a move actually does
Moving between locality areas changes more than the number on your LES.
- Your step may be recomputed. On a promotion involving a locality change, geographic conversion applies first — your old grade and step are re-priced at the new location before the two-step rule runs. See Topic 39.
- Your High-3 follows. Three years at a higher locality late in a career raises the annuity permanently; three years at a lower one lowers it.
- Relocation expenses may or may not be authorized, and that is negotiable at the offer stage — see Topic 20.
- Buying power may move the opposite way. Locality tracks local wages, not local prices.
A move late in a career into a high-locality area is one of the most effective High-3 levers available, because the increase applies to the years that get averaged.
XI How rates get set
Two bodies drive the process. The Federal Salary Council recommends changes to area definitions and rates; the President's Pay Agent makes the determinations. Both rely on Bureau of Labor Statistics survey data comparing federal and non-federal pay for comparable work.
Areas are built largely around metropolitan statistical areas, with adjacent counties added where commuting patterns and federal employment concentrations justify inclusion. That is why locality boundaries can look irregular — the DCB area reaching into West Virginia and Pennsylvania is a commuting-pattern artifact, not an error.
Changes are infrequent and take effect at the start of a calendar year. If your county is under consideration for inclusion in a named area, that is a multi-year process. And as 2026 demonstrates, a recommended change can be overtaken entirely by an alternative pay plan that freezes percentages.
XII The playbook
| Situation | What to do |
|---|---|
| Unsure which locality you are paid | Check the duty station field on your SF-50, not your address. |
| Offered fully remote work | Get the duty station and locality treatment in writing before agreeing. |
| Comparing offers across areas | Locality reflects local wages, not local prices. Run a real cost comparison. |
| Considering a move late in your career | A high-locality move in your final three years raises your High-3 permanently. |
| Near the top of GS-15 in a high area | Check whether the $197,200 cap already binds before counting on an increase. |
| Pursuing an SES appointment | SES has no locality. Model the band against your current locality-adjusted pay. |
| Promotion involving a locality change | Confirm geographic conversion was applied before the two-step rule. |
| Duty station changed without notice | Raise it in writing. It is a pay action with real consequences. |
What to verify
- Confirm your official duty station on your SF-50 and the locality percentage it maps to.
- Re-check it after any reassignment, office move, or telework agreement — the field can change quietly.
- If offered fully remote work, get the duty station and locality consequences in writing before signing.
- Understand that locality tracks local private-sector wages, not cost of living, when comparing areas.
- If you are near the top of GS-15 in a high-locality area, check whether the $197,200 cap already applies.
- If pursuing SES, model the nationwide band against your current locality-adjusted salary.
- On any promotion involving a locality change, confirm geographic conversion ran before the two-step rule.
- If you are within three years of retirement, weigh a high-locality move — it raises your High-3 permanently.
- Remember Rest of U.S. at 17.06% is the floor; no duty station pays base alone.
- Note that 2026 froze locality percentages, so no area gained ground relative to any other this year.
Frequently asked questions
Locality percentages in 2026 range from 17.06 percent for the Rest of U.S. area to 46.34 percent for San Jose-San Francisco. Between those, New York is 37.95 percent, Los Angeles is 36.47 percent, and Washington-Baltimore-Arlington is 33.94 percent, making the capital region the fourth-highest area rather than the highest as many assume. There are 58 locality pay areas in total: 57 named geographic areas plus Rest of U.S., which applies to any duty station outside a named area.
No. Locality percentages were frozen at their 2025 levels by executive order under the alternative pay plan authority, signed August 28, 2025. What did increase was the underlying General Schedule base table, by 1 percent across the board. Because locality is applied as a percentage of base pay, employees still saw a roughly 1 percent increase in total pay — but no locality area gained ground relative to any other, and the gap between the highest and lowest areas is unchanged from 2025.
Where you work. Locality pay is tied to your official duty station as recorded on your SF-50, not your home address. An employee who lives in a low-locality area and commutes into a high-locality duty station receives the higher rate. An employee who lives in an expensive city but whose official duty station is recorded elsewhere receives the elsewhere rate. This single rule generates more confusion and more unexpected pay changes than any other feature of the system, particularly when telework or a reassignment changes the recorded duty station.
No, and the distinction is more than semantic. Locality rates are determined by comparisons of local private-sector salary rates for comparable work, not by the cost of living in an area. That is why some expensive places have unremarkable locality rates while some moderately priced regions with strong private-sector labor markets have higher ones. If you are comparing job offers across areas, the locality percentage tells you about the local labor market for your occupation — it does not tell you what your money will buy.
It depends on what your official duty station becomes. If an approved fully remote arrangement changes your recorded duty station to your home location, your locality changes to that area's rate — which for someone moving out of a high-locality area to a Rest of U.S. location is a substantial pay cut. Reporting at the office at least twice per pay period has generally been the standard for keeping an office duty station. Confirm the treatment in writing before agreeing to any arrangement, because the change is processed as a pay action rather than as a schedule change.
Yes. Total pay including locality is capped at the rate for Level IV of the Executive Schedule, which is $197,200 in 2026. Employees at the top of GS-15 in high-locality areas hit this ceiling, and once you are capped, further locality increases produce nothing. It also has a compressing effect: a GS-15 in San Jose-San Francisco and a GS-15 in a lower-locality area can earn identical capped salaries despite very different nominal rates, which erodes the intended geographic differential at the top of the scale.
The Senior Executive Service does not receive locality pay. SES pay is set within a single nationwide band, which for 2026 runs from $151,661 to $228,000, and the same band applies regardless of where an executive works. That produces a discontinuity worth understanding before pursuing an SES position in a high-locality area: a GS-15 near the top of the DC scale can find that an SES appointment is a smaller raise than expected, or in some cases close to lateral, because the locality component disappears.
The Federal Salary Council recommends changes and the President's Pay Agent makes determinations, generally based on Bureau of Labor Statistics survey data comparing federal and non-federal pay for comparable work in an area. Areas are defined largely around metropolitan statistical areas with adjacent counties added where commuting patterns and employment concentrations justify it. Changes are infrequent and take effect at the start of a calendar year, so if your county is under consideration for inclusion in a named area, that is a multi-year process rather than something that changes mid-year.