Figuring Next Year's Pay

Last week, President Bush announced he was changing the formula used to allocate the locality-based portion of federal employees' annual pay raise. The new method gives more money to cities such as New York and San Francisco that have growing pay gaps between the public and private sectors. Cities such as Cincinnati and Chicago will lose money to make up for it.

Still, assuming Congress passes the 2.2 percent 2007 raise for civilians it already passed for the military, only 0.5 percent will be used for locality pay. The remaining 1.7 percent will go to across-the-board raises for everyone.

Congress likely will not make its final decision on the pay raise until well into 2007, meaning employees will receive the first several weeks' raise retroactively.

Meanwhile, the chart below will help you find your area's likely pay boost and help you to calculate your proposed 2007 salary.

How to Read the Chart

There are 31 cities that have separate locality rates. The remaining locations are grouped into the "Rest of U.S." category. This is the first year that the Kansas City metropolitan area; Orlando, Fla.; and St. Louis are not listed separately in the chart, having been moved back into the Rest of U.S. category.

The first column shows the recommended percentage point increase over the 2006 locality rates. The second column is the net pay increase, which includes the 1.7 percent across-the-board raise all civilian federal employees are expected to receive.

Note that the second column is not simply the first column plus 1.7 percent. It varies because the locality raise is calculated from a different base.

Calculate Your Pay

To calculate your recommended 2007 pay, find your base pay in this chart and multiply that by 1.7 percent, or 0.017. Then add that number to your base pay. Now, take the new number and multiply it by the total locality increase for your area. Add this to the previous number to arrive at your total pay.

For example, if you are a GS 1, Step 1 in Chicago, then you would take the base pay of $16,352 and multiply that by 1.7 percent, getting $278. Adding that to the base pay gets you to $16,630. Now multiply that figure by 21.79 percent, which is the 2007 locality adjustment (up 0.64 percentage points from 2006's 21.15 percent locality adjustment for Chicago). You now have $3,624 in locality adjustments. Add that to $16,630 and you have $20,254.

The calculation works exactly only for employees in Step 1 of any grade level. For other steps, the calculation is close, but not exact to the dollar.

* Wondering why the average locality increase is 0.62 percent and not the 0.5 percent that the president probably will assign for locality pay? That's because only the 48 continental states get locality adjustments. Federal employees in Alaska and Hawaii, and those serving abroad, don't receive these adjustments.