Where Federal Salary is $37,605 Higher —And Why This is Important

Where do federal employees receive the highest federal salary? This can make a big difference now and after retirement. Here is a guide to greater retirement income.

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Federal Salary in Washington vs. Other Federal Employees

How much do federal employees make in a federal salary each year? According to the Office of Personnel Management (OPM), at the end of June 2021, the average federal salary was $91,645. The average American salary in 2020 was $56,310.

What if you could increase your salary from $91,645 to $129,250? $129,250 is the average federal employee salary in the Washington, DC locality pay area as of June 2021.

Would you move from a “rest of the United States” location with a much lower average salary to Washington, DC for several years to increase your “high-3” average salary and to enjoy the higher annuity payment throughout your federal retirement?

A number of federal employees have taken this approach in their careers. Some even rent an apartment in the Washington area for several years to work while family members remain “at home” in another state while the federal employee works in Washington (and returns home frequently) in order to earn a higher salary and greater future retirement benefits. For more information, also see Using Telework to Make Higher Salary While Living in Different Locality Pay Area.

Highest Paying Locality Pay Areas

Knowing where federal employees receive higher salaries can help employees working in other agencies that may be paying less. Some agencies pay higher salaries. That is a departure from more traditional government salary systems which have generally tried to have a standard system of compensation.

With locality pay now ensuring that federal employees in some geographic areas make considerably more than some other areas, and with some agencies securing legislation allowing the payment of higher salaries, new opportunities are open to those in the federal workforce.

As one might expect, the highest paying locality pay areas are in the larger American cities. The locality pay area of the San Jose-San Francisco-Oakland pay area in California currently has a locality pay adjustment of 41.44%. This means GS employees in this area are paid 41.44% above the GS Base Pay Table.

The Washington, DC locality pay area has a locality pay adjustment of 30.48%. This pay area extends out to include part of West Virginia as well as Baltimore and Northern Virginia. The Houston locality area has a pay adjustment of 33.32%. The New York City pay area extends into Connecticut, New Jersey, and Pennsylvania and has an adjustment of 33.98%.

The locality pay area makes a difference. Here is what a hypothetical federal employee at a GS12, Step 7 will make in the following locality areas in 2021:

  • San Francisco: $113,431
  • New York City: $107,448
  • Houston: $106,919
  • Washington, DC: $104,641
  • Rest of the U.S.: $92,988

So, while a federal employee in the “rest of the U.S.” has an annual federal salary of $92,988, that same employee would make considerably more in different cities. And, keep in mind, if your “high-3” retirement salary is this much higher, this differential will also be reflected in the annual cost-of-living-adjustment (COLA) throughout your federal retirement.

How Higher Average Pay Impacts Your Future Retirement Income

While many of the jobs in higher-paying agencies are unique to that agency, the higher salaries are usually common to the entire workforce in that agency. In other words, there are some areas, such as the Washington, DC metropolitan area, where a federal employee can obtain a higher salary by patiently seeking out a job in one of these agencies paying higher salaries. (See What Impact Does the High-3 Have on Your FERS Annuity?)

The benefits of a higher salary do not end with the pay at the end of a pay period.

A federal employee with a higher salary can make more throughout a retirement that can easily last for two decades or more. This is because retirement annuities are based on a “high-3” retirement annuity calculation. In other words, making a higher salary for several years can make a very significant difference in retirement income.

The high-three is the average of your highest-paid period of 36 consecutive months. This three-year period can be at any point of your federal career. Your regular pay, along with any locality pay, is included in the calculation for your high-three average. A higher retirement pay will also lead to a higher COLA calculation each year.

Moving to or at least working in an area where many agency headquarters locations reside will often provide an additional salary boost as grades are often higher in Washington, DC. So, in addition to the locality pay increase, it is possible to receive a promotion that will provide an even higher salary.

While some federal employees may consider moving to the DC area to have disadvantages, it is worth balancing out those perceived disadvantages with the potential for a higher retirement income that a retired federal employee will enjoy for a number of years.

In other words, increasing your annual retirement income should be an important part of your retirement planning.

Federal Salary Over $100,000 and Over $200,000

For this article, unless otherwise indicated, the source for the information is FedsDataCenter.com. It has been around for a number of years and is widely used by those interested in obtaining the desired information. FedsDataCenter.com is not hosted or maintained by FedSmith.

530,563 federal employees earned more than $100k in 2020. 37,233 federal employees earned more than $200k in 2020.

Agencies with Highest and Lowest Average Federal Salary

Where do federal employees earn the highest salary and where do they earn the least? Here are the agencies with the highest average salaries.

Highest Average Salaries

AgencyAverage Salary
SECURITIES AND EXCHANGE COMMISSION200,376.96
COMMODITY FUTURES TRADING COMMISSION194,773.18
INTELLECTUAL PROPERTY ENFORCEMENT COORDINATOR176,825.00
PUBLIC BUILDINGS REFORM BOARD166,498.54
FEDERAL HOUSING FINANCE AGENCY165,713.26
ARCTIC RESEARCH COMMISSION156,418.62
DEFENSE NUCLEAR FACILITIES SAFETY BOARD154,792.03
NUCLEAR WASTE TECHNICAL REVIEW BOARD152,216.97
MEDICARE PAYMENT ADVISORY COMMISSION150,177.91
FEDERAL PERMITTING IMPROVEMENT STEERING COUNCIL148,689.50

Lowest Average Salaries

AgencyAverage Salary
MORRIS K. UDALL AND STEWART L. UDALL FOUNDATION78,598.58
DEPARTMENT OF AGRICULTURE75,930.01
SMALL BUSINESS ADMINISTRATION72,092.97
INTERNATIONAL BOUNDARY AND
WATER COMMISSION U.S. SECTION
71,921.40
COMMISSION ON INTERNATIONAL RELIGIOUS FREEDOM66,944.67
ARMED FORCES RETIREMENT HOME66,238.80
NORTHERN BORDER REGIONAL COMMISSION61,971.50
FARM CREDIT ADMINISTRATION21,046.17
COMMISSION FOR PRESERVATION OF
AMERICA’S HERITAGE ABROAD
10,344.74

Obviously, the agencies listed are generally not among the largest federal agencies. As noted above, some agencies have the legislative authority to use a different pay scale other than the more common General Schedule (GS) pay system.

While an individual may not have the expertise to have one of the technical jobs in an agency such as the Securities and Exchange Commission, these agencies have the usual range of jobs available in other areas ranging from Information Technology to Human Resources and Equal Employment Opportunity. These jobs often result in a higher salary in the agencies that have a higher average salary.

Some organizations, such as the Federal Permitting Improvement Steering Council, is a relatively new organization and is unique in its structure. This organization is made up of representatives at the agency Deputy Secretary-level and is chaired by an Executive Director, appointed by the President. But, for a federal employee seeking higher pay for several years to improve future retirement income, checking out all of the possibilities for job opportunities can be a worthwhile endeavor.

Some of the organizations with a higher average salary also have positions in locations other than the Washington, DC area, including in cities that serve as a regional center for a geographic area.

The Securities and Exchange Commission (SEC) is always on the list of the highest or one of the federal agencies with the highest average federal salary. While it is an agency with a particular area of expertise, it has been in existence for some time. The SEC was created in 1934—as a result of the stock market crash in 1929. The mission of this agency includes protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

The average salary for a federal worker at the SEC is $200,376.96. According to FY 2020 data, the SEC had 4,366 federal employees with a salary greater than $100,000 and with 2,701 federal employees making more than $200,000.

How to Locate Individual Federal Salary Amounts

For information on how to locate individual federal employee salaries, check out the article Quickly Searching 1.4 Million Federal Pay Rates.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47