Locality attaches to the official duty station on your SF-50, not to the city you move to or the address you live at. Before modelling anything, confirm what the new duty station will actually be recorded as — in writing.
I The calculator
What Does This Transfer Do to My Pay?
Lateral transfer assumed — same grade and step, different duty station.
II The cap that flattens the difference
Total locality-adjusted basic pay cannot exceed Executive Schedule Level IV, which is $197,200 in 2026.
Where base pay plus the full locality adjustment would go past it, the payable rate is capped — so the headline percentages stop describing what you actually receive.
Two high-locality areas, almost no difference
A GS-15 step 10 with a base rate of $164,301 considering a move from New York to San Francisco.
Both are capped at $197,200. The move is worth nothing in pay terms, despite an 8.39 point difference in the published rates — while the cost of living difference is entirely real.
Note also that although locality percentages are frozen for 2026 under EO 14368, the cap itself rose from $195,200 to $197,200 — so payable amounts moved at the top of the scale even where the rate did not. See locality pay.
III Why timing decides the real cost
Locality pay is basic pay. It counts toward the high-3 average salary and toward agency TSP contributions — unlike non-foreign COLA or overseas allowances, which raise take-home and build no pension.
So the same transfer has very different consequences depending on when it happens:
| When you move | Effect on pay | Effect on annuity |
|---|---|---|
| More than 3 years out | Immediate | Little or none, if you move again |
| Within the final 3 years | Immediate | Permanent, in either direction |
An employee two years from retirement being moved to a lower-locality duty station is facing an annuity reduction, not merely a pay cut — and that is worth raising explicitly rather than absorbing. Model the annuity itself in the FERS pension estimator.
IV The relocation tax
Whether the agency funds the move is a decision under the Federal Travel Regulation and agency policy — not automatic, and frequently not offered at all for employee-requested transfers.
Since the 2017 tax law removed the moving expense exclusion, relocation reimbursements for civilian federal employees are taxable income, permanently. A Relocation Income Tax Allowance and Withholding Tax Allowance offset part of the burden but do not make the move tax-neutral, and they carry their own timing complications. A $30,000 package is not $30,000. See relocation and PCS orders.
Frequently asked questions
Your locality percentage, because locality attaches to the official duty station recorded in your personnel records rather than to where you live. Your grade and step do not change on a lateral transfer, so the base rate is the same in both places — what moves is the adjustment applied on top of it. If both duty stations sit in the same locality area, a transfer changes your commute and nothing about your pay.
Because locality pay is part of basic pay. Unlike allowances such as non-foreign COLA or overseas post allowances, locality enters the FERS high-3 average salary and increases agency Thrift Savings Plan contributions. A move to a higher locality area in your final three years raises the high-3 and therefore the annuity for life; a move to a lower one reduces it permanently. Outside that window the effect on the annuity is limited, which is why timing matters more than the size of the change.
A ceiling on total locality-adjusted basic pay set at the rate for Executive Schedule Level IV, which is $197,200 in 2026. Where base pay plus the full locality adjustment would exceed it, the payable rate is capped. The practical effect is that senior employees in high-locality areas receive less than the headline percentage suggests, and additional steps produce progressively less pay — so a transfer between two high-locality areas can produce a much smaller change than the difference in rates implies.
The percentages are frozen at 2025 levels. Executive Order 14368 provided a 1.0 percent increase to the base General Schedule table and 0.0 percent to locality for 2026. The payable amounts still moved for employees affected by the cap, because the Executive Schedule Level IV figure itself rose from $195,200 to $197,200 — so a frozen percentage does not mean a frozen paycheque at the top of the scale.
It is a decision under the Federal Travel Regulation and agency policy, not an automatic entitlement, and it depends heavily on whether the move is in the interest of the government or at your own request. Employee-requested transfers are frequently not funded at all. Get the authorisation in writing before committing to anything, because the difference between a funded and unfunded move is often larger than the pay change itself.
Yes. Since the 2017 tax law removed the moving expense exclusion, relocation reimbursements for civilian federal employees are taxable income, and that change is permanent. A Relocation Income Tax Allowance and a Withholding Tax Allowance exist to offset part of the resulting burden, but they do not make the move tax-neutral and they have their own timing complications. Model the tax before treating a relocation package as money in hand.
Only if it changes your official duty station. An employee with a telework agreement is considered located at the agency worksite for locality pay purposes as long as they report in person at least twice per biweekly pay period. Meet that threshold and you stay on the office's locality table regardless of how many days you work from home. Consistently fall below it and you are functioning as a remote worker, and locality should follow your actual worksite.
Get the new official duty station and the resulting locality rate in writing, not the city name. Confirm whether relocation expenses are authorised and model the tax on any reimbursement. Establish how many years you have until retirement, because a move inside the final three changes your annuity rather than just your pay. And check your SF-50 after the move to confirm the duty station on file matches where you are actually reporting.