Step increases: the 18-year climb hidden inside every GS grade.

The step increase system is often described as automatic. In practice, the statute requires three conditions and agencies have always had the authority — rarely exercised — to withhold a WGI when performance does not meet an acceptable level of competence. A June 17, 2025 OPM memo to agencies made the non-automatic character explicit, instructing agencies that WGIs are not to be paid to employees with ratings of record below Fully Successful and that payment should never be viewed as automatic or routine. In a system where approximately 1 in 1,000 WGIs was historically denied, the change is more about posture than about denial volume — but the posture matters. Employees whose performance slips can no longer rely on the assumption that the step increase will arrive regardless.

The mechanics of the system are worth understanding for three reasons. First, the dollar value of step increases compounds meaningfully over a career — roughly 30 percent of base pay accumulates between step 1 and step 10 of a grade. Second, the Quality Step Increase authority offers a one-step acceleration for outstanding performance that most employees never know to ask about. Third, the WGI denial and reconsideration framework protects employees when a supervisor attempts to withhold a step increase improperly. This guide covers all three, plus the interaction between step increases, promotions, and the two-step promotion rule.

Section I The legal framework — 5 U.S.C. 5335 and 5 CFR 531

Federal step increase authority flows from statute into OPM's implementing regulations. Three sources govern virtually all within-grade increase questions.

5 U.S.C. 5335 — the statutory authority

5 U.S.C. 5335 establishes that a GS employee receiving less than the maximum rate of the grade shall earn advancement to the next step on completion of the statutory waiting period, provided the employee's performance is at an acceptable level of competence and no equivalent increase in pay has occurred during the waiting period. The statute also authorizes agencies to withhold the increase when performance is not at an acceptable level, subject to specific notice and reconsideration procedures that preserve the employee's rights.

5 U.S.C. 5336 — the Quality Step Increase authority

5 U.S.C. 5336 authorizes an additional step increase — the QSI — for employees demonstrating outstanding performance. The QSI is defined as an increase in basic pay from one step to the next higher step within the grade, in addition to the periodic within-grade increase that the employee would otherwise earn on the statutory schedule.

5 CFR Part 531

OPM's implementing regulations at 5 CFR Part 531, Subpart D, cover the mechanics of regular within-grade increases — waiting periods, creditable service, acceptable level of competence determinations, and agency notice obligations. Subpart E covers Quality Step Increases, including eligibility criteria and the interaction with regular WGIs. The regulations tie in definitions of equivalent increase (5 CFR 531.407) that govern when a promotion or other pay event restarts or credits a waiting period.

The June 2025 OPM guidance

A June 17, 2025 OPM memo to agencies reframed longstanding practice. The memo instructs agencies that within-grade increases are not to be paid to employees with ratings of record below Fully Successful and that agencies should certify an employee's performance is qualifying before approving the increase. The memo's operative language: the payment of within-grade increases should never be viewed as automatic or routine. The memo does not change the statutory framework — the three requirements under 5 U.S.C. 5335 already governed eligibility — but it clarifies that agencies are expected to exercise the certification function more actively than the historical practice of automatic approval.

Section II The waiting-period schedule

The waiting periods between steps are set by statute and do not vary by agency. They also do not vary by grade — the same schedule applies whether the employee is a GS-4 step 3 or a GS-15 step 3.

The three tiers

Steps 1 through 4 — 52 weeks each. Between step 1 and step 2, step 2 and step 3, and step 3 and step 4, the employee must complete 52 weeks of creditable service. At the end of the third 52-week period, the employee reaches step 4.

Steps 4 through 7 — 104 weeks each. Between step 4 and step 5, step 5 and step 6, and step 6 and step 7, the waiting period doubles to 104 weeks (roughly two years). This reflects the policy view that accelerated step progression should occur during the early years at grade, when the employee is most actively developing proficiency.

Steps 7 through 10 — 156 weeks each. Between step 7 and step 8, step 8 and step 9, and step 9 and step 10, the waiting period extends to 156 weeks (roughly three years). These are the "longevity" steps that reward long service at a single grade.

Total time to step 10

Calculating from step 1: three 52-week periods (156 weeks) plus three 104-week periods (312 weeks) plus three 156-week periods (468 weeks) totals 936 weeks — approximately 18 years of continuous acceptable service. An employee hired at step 1 who stays at a single grade reaches step 10 late in a typical federal career.

Creditable service

5 CFR 531.406 defines what counts toward the waiting period. Time in pay status generally counts. Paid leave (annual leave, sick leave, military leave) counts. Unpaid leave, extended leave without pay, and other non-pay statuses generally do not count except under specific conditions. Time during which a separated employee receives injury compensation under subchapter I of chapter 81 is creditable when the employee is reemployed with the federal government. The calculation is typically handled by payroll systems that track creditable service automatically; the practical effect is that employees who take extended LWOP may find their waiting period extended by the amount of time they were not in creditable pay status.

Section III Acceptable level of competence

The "acceptable level of competence" requirement under 5 U.S.C. 5335 is the test most directly affected by the June 2025 OPM guidance.

The standard

To meet the acceptable level of competence requirement, an employee's most recent performance rating of record must be at least Level 3 — "Fully Successful" or equivalent under the agency's performance appraisal system. Agencies use different rating systems and different terminology, but OPM's cross-walk places Level 3 as the floor for WGI eligibility. Employees rated at Level 1 (Unacceptable) or Level 2 (Minimally Successful or equivalent) do not meet the acceptable level of competence standard.

Certification

The June 2025 OPM guidance emphasized that agencies should certify an employee's performance is qualifying before approving the increase. In practice, this means the supervisor is asked to affirm that the employee's performance remains at or above Fully Successful at the time the WGI is due — not just at the time of the most recent annual rating. The historical pattern of automated WGI processing based on the last rating of record continues, but the supervisor's certification role is more explicit.

What happens when performance slips

If an employee's performance declines between annual ratings and the supervisor believes the acceptable level of competence standard is no longer met, the supervisor has two paths: initiate a performance improvement action (see our Workplace pillar guide on PIPs) or recommend WGI withholding. WGI withholding requires specific notice procedures and is appealable through the reconsideration process. Supervisors who simply inform the employee the WGI will not be approved without following the procedural steps risk reversal on appeal.

Section IV Quality Step Increases — the acceleration authority

The QSI is the one-step accelerator most federal employees never ask about and most supervisors rarely use. Agencies have discretion to award QSIs; employees do not request them as entitlements.

Eligibility

Three requirements under 5 CFR 531.504:

Rating of record at Level 5. The employee's most recent rating of record must be at Level 5 — "Outstanding" or the equivalent highest rating under the agency's appraisal system. Agencies using pass/fail appraisal systems typically cannot award QSIs because there is no equivalent to Level 5 in a two-tier system.

Sustained performance of high quality. The rating alone is not sufficient; the employee must have demonstrated sustained performance of high quality. This is a qualitative judgment by the approving official.

No QSI in the preceding 52 weeks. An employee who received a QSI in the past 52 calendar weeks is not eligible for another.

How a QSI affects the WGI clock

A QSI does not reset the regular WGI clock in most cases. The employee advances one step earlier than the schedule would allow, and the time already served toward the next WGI continues to count. The exception: when a QSI places the employee at step 4 or step 7, the waiting period to the next step lengthens from 52 to 104 weeks or from 104 to 156 weeks respectively. In those cases, the full new waiting period applies. The time already served toward the earlier-tier waiting period counts toward completion of the new longer waiting period.

Example

An employee received her last WGI to step 3 in January 2025. In October 2025, she receives a QSI to step 4, which places her in a 104-week waiting period before she would be eligible to advance to step 5. She advances to step 5 in January 2027 — completing the 104 weeks from her last regular WGI. Without the QSI, she would have received her normal WGI to step 4 in January 2026 and would have had to wait until January 2028 to reach step 5. The QSI accelerated her step progression by one year while preserving the time already served.

QSI interaction with promotions and general pay adjustments

If a QSI and a general pay adjustment take effect on the same date, the agency processes the general pay adjustment first, then applies the QSI. If a QSI and a promotion take effect on the same date, the agency processes the QSI first, then the promotion. These sequencing rules generally benefit the employee by calculating the QSI on the pre-promotion pay rate where applicable.

Section V Dollar value across grades

Each step is a fixed dollar amount within a grade, set by OPM on the annual pay tables. The step dollar value is approximately 3 percent of base pay for that grade, though the exact ratio varies slightly across the schedule.

2026 base GS step values (illustrative)

At GS-7, a single step on the 2026 base schedule is approximately $1,437. At GS-12, approximately $2,549. At GS-15, approximately $4,213. Locality pay then applies on top of these base figures, proportionally increasing the dollar value. In a high-locality area like Washington-Baltimore or San Francisco, the effective step increase can be 30 to 50 percent higher than the base figure.

Cumulative career value

From step 1 to step 10 of the same grade — 9 step increases — the cumulative increase is approximately 30 percent of base pay. For a GS-13 in a typical locality, that represents tens of thousands of dollars annually once locality pay is applied. Over the 18 years required to reach step 10, the total cumulative earnings differential between an employee who stayed at step 1 (impossible, but illustrative) and one who advanced to step 10 would be approximately 15 percent of total grade earnings over that period.

FERS high-3 interaction

The FERS high-3 average salary is calculated from the three highest-earning consecutive years of federal service. For employees retiring at a given grade and step, those three years are typically the final three before retirement. Step progression during the final years directly affects the FERS pension calculation for the rest of the retiree's life. See our Benefits pillar guide on FERS accrual mechanics for the detailed interaction.

Section VI Equivalent increases and the waiting-period reset

Under 5 U.S.C. 5335, an employee who receives an "equivalent increase" during the waiting period is not entitled to a WGI at the end of that waiting period — the equivalent increase effectively satisfies the step-progression function. The definition of equivalent increase at 5 CFR 531.407 is key to understanding when a promotion or other pay event restarts the clock.

What counts as an equivalent increase

5 CFR 531.407 identifies several events as equivalent increases for GS employees, including a regular within-grade increase (excluding a QSI), a promotion to a higher GS grade, application of the superior qualifications pay-setting authority resulting in a higher step rate, and certain other pay-adjustment actions that move the employee's rate upward.

What does not count

A QSI is specifically excluded from the equivalent increase definition — that is why a QSI does not ordinarily reset the regular WGI clock. General pay adjustments (annual pay raises, locality pay adjustments) are not equivalent increases because they apply uniformly across the schedule rather than advancing a specific employee within the grade. Temporary promotions that end with the employee returning to the former grade are generally not equivalent increases.

Promotion and the two-step rule

When an employee is promoted to a higher grade, the two-step promotion rule under 5 CFR 531.214 typically determines the new step. The employee's pay is increased by two within-grade increases at the old grade, and the resulting amount is placed at the lowest step of the new grade that equals or exceeds that amount. The promotion resets the waiting-period clock — the employee starts a new waiting period at the new grade and step. See our Career & Pay guide on career ladders and full performance levels for how this works inside career-ladder promotions specifically.

Section VII WGI denial and reconsideration

WGI denials are procedurally demanding and operationally rare. MSPB data indicates historical denial rates around 1 in 1,000 WGIs governmentwide. The June 2025 OPM guidance did not set a target for increased denials but did reframe expectations around certification.

Notice requirements

If an agency determines an employee's performance is not at an acceptable level of competence, the agency must provide written notice to the employee explaining the deficiencies and offering a reasonable opportunity to demonstrate acceptable performance. The notice must be specific enough to inform the employee of what performance is unacceptable and what is required to correct it. Agencies that fail to provide sufficient notice risk reversal on reconsideration or appeal.

Reconsideration

Under 5 U.S.C. 5335(c), an employee who receives a negative WGI determination may request reconsideration. If the agency denies the request, the employee has further appeal rights. Under the same statute, the agency must reconsider a negative determination at least every 52 weeks — which creates an annual review cycle during which the employee can demonstrate improved performance and potentially receive the withheld WGI.

MSPB appeal

Certain WGI denial actions are appealable to the Merit Systems Protection Board. The procedural specifics depend on the nature of the action and whether it occurred as part of a broader performance-based action (such as a PIP or Chapter 43 action). See our Workplace pillar guide on WIGI denials for the full appeal framework.

When denial is most likely

In practice, WGI denials cluster with other performance-based actions rather than occurring in isolation. An employee on a formal PIP, under a proposed performance-based demotion, or following a removal for cause is more likely to see a WGI withheld than an employee with generally strong performance. For employees whose performance is solidly Fully Successful or above, the WGI remains the near-automatic pay event it has always been in practice.

Section VIII Frequently asked questions