Winners and Losers in Locality Pay Value for Federal Employees

Locality pay now covers most federal employees. How much difference does a locality pay area make in salary levels?

Rapidly Expanding Number of Federal Employees in Locality Pay

The “Rest of the US” category of locality pay for federal employees is shrinking. The federal government’s system for awarding locality pay to employees has been expanding. In 2023, most federal employees (1,546,343 or 68.7%) were in a locality pay area. These figures do not include the approximately 33,000 federal employees added to the system for 2024. The locality pay system will eventually include the vast majority of federal employees as more are being added yearly, with the changes being recommended by the Federal Salary Council, approved by the President’s Pay Agent, and implemented by the Office of Personnel Management.

The locality pay system enables the executive branch of the federal government to raise wages without involving Congress and raise the average salary to over $101,000 before the 2024 pay raise was implemented. Part of this rationale is that federal employees are underpaid by 27.54% compared to their private sector counterparts.

These are the four newest locality pay areas and their 2024 raises in their first year as part of this pay system:

Fresno-Madera-Hanford, CA5.28%
Reno-Fernley, NV5.25%
Rochester-Batavia-Seneca Falls, NY5.46%
Spokane-Spokane Valley-Coeur d’Alene, WA-ID5.3%

Locality Pay Areas and Federal Workforce Data

There are now 58 locality pay areas counting the pay rate system in Alaska, Hawaii, and the “Rest of the US.”

The average grade in the United States for GS employees as of September 30, 2023, was 10.55. The average grade in the Washington, DC, locality pay area was 12.74.

About 14% of the federal employees in the General Schedule are in the Washington, DC area. Almost 96% are in the FERS system, and there were 2,258,821 federal employees in this workforce profile according to the Office of Personnel Management.

Percentage Differences in Locality Pay Across the U.S.

A federal pay increase is usually announced in late December. The locality pay system alters the announced average pay raise by increasing the raise more in some areas than others. To see how much of a difference this pay system makes, the pay raise amounts in ten sample LPAs from 2018-2024 are in the next chart.

As the chart shows, the amount of a yearly raise has varied widely in these eight years. With inflation hitting highs not seen in 40 years, we would expect salaries to go up, and that has happened. The highest raise in 2024 was in the Seattle-Tacoma area (5.7%), and the lowest was in the Rest of the US at about 5%.

While the difference in one year is not a wide variation, the difference in total salary grows wider over these eight years.

This chart shows the stated percentage increase in the annual raise in each locality pay area from 2018-2024.

Locality2018 Raise2019 Raise2020 Raise2021 Raise2022 Raise2023 Raise2024 RaiseTotal
Seattle, WA2.11%2.15%3.4%1%3.21%5.15%5.7%22.7%
San Francisco, CA2.21%2.18%3.4%1%3.14%5.13%5.62%22.7%
New York, NY2.10%2.11%3.31%1%3.02%4.95%5.53%22.0%
Albany, NY1.97%2.0%3.2%1%2.89%4.78%5.4%21.2%
Washington, DC2.29%2.27%3.52%1%3.02%4.86%5.31%22.3%
Burlington, VT1.67%2.11%3.23%1%2.84%4.71%5.28%20.8%
Virginia Beach, VA1.67%1.87%3.13%1%2.79%4.78%5.16%20.4%
Huntsville, AL1.98%1.99%3.18%1%2.71%4.54%5.15%20.5%
Palm Bay, FL1.80%1.75%2.95%1%2.45%4.36%4.97%19.3%
Rest of US (RUS)1.67%1.66%2.85%1%2.42%4.37%4.99%19.0%
Chart ©2024 by

The differences in payment amounts are not accidental. The locality pay system is constructed to pay a higher salary in some geographic areas than in others.

In these ten areas, the average increase was about 21% over seven years. The Rest of the US received the lowest percentage increase (19%). The Seattle-Tacoma area had the highest average increase (22.27%).

The area with the highest concentration of federal employees is the Washington-Baltimore area, which also has the highest average grade level. The percentage increase for the large Washington locality pay area was 22.27%. The dollar increase was for a GS12, Step 5, and was just over $20,000.

The Office of Personnel Management (OPM) lists each locality pay area with an adjustment percentage. For example, for 2024, the pay adjustment for the San Francisco LPA is 45.41%.

This system seeks to pay federal employees a salary based on the disparity with private sector salaries in a specific geographic area as compiled by the Federal Salary Council. It is designed to account for regional differences and maintain competitive salaries across the United States. It does not take into account the fringe benefits in the salary data.

Significant Difference Between Locality Pay Areas

How much of a difference does this raise make over time?

Here is the salary of a GS-12, step 5 in each of these years in each listed LPA. The percentage beside each LPA in the chart shows the locality pay adjustment listed by the Office of Personnel Management (OPM) on the 2024 GS pay tables.

Burlington, Vermont, and Virginia Beach, Virginia, were added to the locality pay area system in 2019.

The largest difference in salary was between the San Francisco area and the Rest of the U.S. Employees in San Francisco’s locality pay area received $6,886 more in salary than the Rest of the U.S. from 2018-2024. At some grade levels, the differential would have been greater. This is an example using one grade and step in the General Schedule.

Pay Area2018201920202021202220232024IncreaseIncrease
San Francisco (45.41%)$100,393$102,582$106,067$107,128$110,491$116,155$122,675$22,28222.2%
New York, NY (37.24%)$95,239$97,254$100,473$101,478$104,546$109,716$115,783$20,54421.6%
Washington, DC
Seattle, WA
Huntsville, AL
Albany, NY $83,973$85,654$88,399$89,283$91,867$96,252$101,449$17,47620.8%
Burlington, VT
Virginia Beach, VA (18.48%) $83,159$84,179$87,372$88,246$90,706$95,035$99,939$16,78020.2%
Palm Bay, FL
Rest of US (RUS)
Chart ©2024 by

Best of Both Worlds: A Rural Location in a Metropolitan Pay Area

Most federal employees are in a locality pay area. While the group outside LPAs is less than half of the federal workforce and is growing smaller, most people want a higher salary level. That can happen after being added to a locality pay area or creating a new one.

With the rapid expansion and geographic enlargement of existing pay areas, employees in rural areas are now getting higher salaries just as if they were living in downtown cities like Boston, New York, or Washington, DC.

In reality, they may be hours away from the federal offices to which they are assigned. While some may drive or take a train for this distance, many probably work at home. If that can be done, the advantages are significant.

Compare these two places, both in the Washington locality pay area. According to Zillow, a house in Hampshire, West Virginia, averages $225,849 and is trending up 4% in the last year as of the time of this writing. According to Zillow, the average home in Alexandria, Virginia, is $612,093, up 4.7% over the last year as of the time of this writing.

With the difference of about $386,000 or more in housing costs alone (not including higher taxes and higher cost of groceries) and receiving the same salary in both locations, there is a big difference in expenses. In Alexandria, the median property tax (also known as real estate tax) is $4,061.00 per year, based on a median home value of $486,800.00 and a median effective property tax rate of 0.83% of property value. In Hampshire, WV property taxes are about $543.00 per year based on a median home value of $134,100.00 and a median effective property tax rate of 0.40% of property value as of the time of this writing.

Nevertheless, federal employees receive the same 33.26% locality pay adjustment in both locations.

While the number of restaurants and various social options are more limited in a rural area, the money will go much further in West Virginia. For those who desire a choice of high-end foreign restaurants, a diversity of population, and a wide range of entertainment, the DC area is a good place to be.

The better restaurants near Hampshire (not in the town) include the Main Street Grill and Lost Mountain BBQ. Coincidentally, a resident of Alexandria highly recommended this Grill on Yelp. She took a railroad excursion to Hampshire and wrote that “after this amazing adventure, I took my parents to this restaurant.” She may not have been a federal employee and probably did not realize that despite the distance from Alexandria, she was still in the DC locality pay area.

One of the best restaurants in Alexandria is La Refuge. The restaurant menu did not find prices for la Refuge. Undoubtedly, the la truite belle meuniere aux amandes at la Refuge is more elaborate, prepared by a gourmet chef, and more expensive than the Country Fried Chicken Bowl at the Grill at only $9.99.

For those who might like to travel to Hampshire or those considering a move to this lower-cost area in the outer limits of the Washington-Baltimore locality pay area, it is about two hours and 45 minutes with light weekend traffic. Rush hour traffic will add considerably to this route in both directions. It seems unlikely many federal employees take this commute every day despite being in the same “locality pay area.”

Federal employee unions are all in for employees working at home. Employees like that option. As long as Uncle Sam is willing to pay the same salary in both locations, the employees taking advantage of the differential may make the TSP millionaires list much quicker than those living in or close to the city of Washington, DC.

Cost of Living and GS Locality Pay Areas

The most common question to FedSmith about locality pay is: “Why is [my city] not included in a locality pay area? The cost of living is very high in [my city], and it is unfair that federal employees here do not receive locality pay.”

GS locality pay is not a cost of living adjustment.

Locality pay increases are based on a comparison by the Bureau of Labor Statistics. This federal agency measures non-federal compensation in a labor market and compares it to federal pay for GS employees performing similar work in the same geographic area.

BLS will, for example, compare the average salary of an engineer at a private company or state with the average salary of a federal employee who is an engineer in the same city. The pay gap between the two is a major factor in the GS locality pay adjustment for a specific area during a given year. Housing or other living expenses in an area are not the major factor.

These are the OPM comments on the cost of living in an area and how this impacts locality pay:

Under 5 U.S.C. 5304, locality pay rates are based on comparisons of GS pay and non-Federal pay at the same work levels in a locality pay area rather than on any consideration of local living costs. Relative living costs may indirectly affect non-Federal pay levels, but living costs are just one of many factors that affect the supply of and demand for labor, and therefore labor costs, in a locality pay area. A comparison of living costs between geographic areas is not permitted under the locality pay law, but even if it were, it would not be a reliable indicator of local labor costs.

Where are the 58 2024 locality pay areas, and how are they defined?

Here are the 2024 GS locality pay areas that will receive locality pay beginning in January 2024.

(1) Alaska—consisting of the State of Alaska;
(2) Albany-Schenectady, NY-MA—consisting of the Albany-Schenectady, NY CSA and also including Berkshire County, MA, Greene County, NY, and Hamilton County, NY;
(3) Albuquerque-Santa Fe-Las Vegas, NM—consisting of the Albuquerque-Santa Fe-Las Vegas, NM CSA and also including Cibola County, NM, and McKinley County, NM;
(4) Atlanta—Athens-Clarke County—Sandy Springs, GA-AL—consisting of the Atlanta—Athens-Clarke County—Sandy Springs, GA-AL CSA and also including Cherokee County, AL, Cleburne County, AL, Lee County, AL, Randolph County, AL, Russell County, AL, Banks County, GA, Chattahoochee County, GA, Elbert County, GA, Franklin County, GA, Gilmer County, GA, Gordon County, GA, Greene County, GA, Harris County, GA, Lumpkin County, GA, Marion County, GA, Muscogee County, GA, Putnam County, GA, Rabun County, GA, Stewart County, GA, Talbot County, GA, Taliaferro County, GA, and White County, GA;
(5) Austin-Round Rock-Georgetown, TX—consisting of the Austin-Round Rock-Georgetown, TX MSA and also including Blanco County, TX, Burnet County, TX, Lee County, TX, and Milam County, TX;
(6) Birmingham-Hoover-Talladega, AL—consisting of the Birmingham-Hoover-Talladega, AL CSA and also including Calhoun County, AL, Clay County, AL, Coosa County, AL, Etowah County, AL, Greene County, AL, Hale County, AL, Pickens County, AL, Tallapoosa County, AL, Tuscaloosa County, AL, and Winston County, AL;
(7) Boston-Worcester-Providence, MA-RI-NH-CT-ME-VT—consisting of the Boston-Worcester-Providence, MA-RI-NH-CT CSA and also including Androscoggin County, ME, Cumberland County, ME, Sagadahoc County, ME, York County, ME, Dukes County, MA, Nantucket County, MA, Carroll County, NH, Cheshire County, NH, Grafton County, NH, Sullivan County, NH, Orange County, VT, and Windsor County, VT;
(8) Buffalo-Cheektowaga-Olean, NY—consisting of the Buffalo-Cheektowaga-Olean, NY CSA and also including Allegany County, NY, and Wyoming County, NY;
(9) Burlington-South Burlington-Barre, VT—consisting of the Burlington-South Burlington-Barre, VT CSA and also including Addison County, VT, and Lamoille County, VT;
(10) Charlotte-Concord, NC-SC—consisting of the Charlotte-Concord, NC-SC CSA and also including Alexander County, NC, Burke County, NC, Caldwell County, NC, Catawba County, NC, and Chesterfield County, SC;
(11) Chicago-Naperville, IL-IN-WI—consisting of the Chicago-Naperville, IL-IN-WI CSA and also including Boone County, IL, Iroquois County, IL, Ogle County, IL, Stephenson County, IL, Winnebago County, IL, and Starke County, IN;
(12) Cincinnati-Wilmington-Maysville, OH-KY-IN—consisting of the Cincinnati-Wilmington-Maysville, OH-KY-IN CSA and also including Ripley County, IN, Switzerland County, IN, Carroll County, KY, Fleming County, KY, Lewis County, KY, Owen County, KY, Robertson County, KY, Adams County, OH, and Highland County, OH;
(13) Cleveland-Akron-Canton, OH-PA—consisting of the Cleveland-Akron-Canton, OH CSA and also including Ashland County, OH, Columbiana County, OH, Crawford County, OH, Harrison County, OH, Holmes County, OH, Mahoning County, OH, Richland County, OH, Trumbull County, OH, and Mercer County, PA;
(14) Colorado Springs, CO—consisting of the Colorado Springs, CO MSA and also including Fremont County, CO, and Pueblo County, CO;
(15) Columbus-Marion-Zanesville, OH—consisting of the Columbus-Marion-Zanesville, OH CSA and also including Coshocton County, OH, Hardin County, OH, Morgan County, OH, Noble County, OH, Pike County, OH, and Vinton County, OH;
(16) Corpus Christi-Kingsville-Alice, TX—consisting of the Corpus Christi-Kingsville-Alice, TX CSA and also including Brooks County, TX, Live Oak County, TX, and Refugio County, TX;
(17) Dallas-Fort Worth, TX-OK—consisting of the Dallas-Fort Worth, TX-OK CSA and also including Carter County, OK, Love County, OK, Delta County, TX, Hill County, TX, Hopkins County, TX, Jack County, TX, Montague County, TX, Rains County, TX, Somervell County, TX, and Van Zandt County, TX;
(18) Davenport-Moline, IA-IL—consisting of the Davenport-Moline, IA-IL CSA and also including Carroll County, IL, Lee County, IL, Whiteside County, IL, Cedar County, IA, Jackson County, IA, and Louisa County, IA;
(19) Dayton-Springfield-Kettering, OH—consisting of the Dayton-Springfield-Kettering, OH CSA and also including Allen County, OH, Auglaize County, OH, Mercer County, OH, Preble County, OH, and Van Wert County, OH;
(20) Denver-Aurora, CO—consisting of the Denver-Aurora, CO CSA and also including Larimer County, CO, and Lincoln County, CO;
(21) Des Moines-Ames-West Des Moines, IA—consisting of the Des Moines-Ames-West Des Moines, IA CSA and also including Adair County, IA, Clarke County, IA, Greene County, IA, Hamilton County, IA, Lucas County, IA, Monroe County, IA, and Poweshiek County, IA;
(22) Detroit-Warren-Ann Arbor, MI—consisting of the Detroit-Warren-Ann Arbor, MI CSA and also including Clinton County, MI, Eaton County, MI, Huron County, MI, Ingham County, MI, Jackson County, MI, Sanilac County, MI, Shiawassee County, MI, and Tuscola County, MI;
(23) Fresno-Madera-Hanford, CA—consisting of the Fresno-Madera-Hanford, CA CSA and also including Mariposa County, CA, and Tulare County, CA;
(24) Harrisburg-Lebanon, PA—consisting of the Harrisburg-York-Lebanon, PA CSA, except for Adams County, PA, and York County, PA, and also including Juniata County, PA, and Lancaster County, PA;
(25) Hartford-East Hartford, CT-MA—consisting of the Hartford-East Hartford, CT CSA and also including Franklin County, MA, Hampden County, MA, and Hampshire County, MA;
(26) Hawaii—consisting of the State of Hawaii;
(27) Houston-The Woodlands, TX—consisting of the Houston-The Woodlands, TX CSA and also including Colorado County, TX, Grimes County, TX, Jackson County, TX, Madison County, TX, San Jacinto County, TX, and Trinity County, TX;
(28) Huntsville-Decatur, AL-TN—consisting of the Huntsville-Decatur, AL CSA and also including Colbert County, AL, DeKalb County, AL, Lauderdale County, AL, Marshall County, AL, and Lincoln County, TN;
(29) Indianapolis-Carmel-Muncie, IN—consisting of the Indianapolis-Carmel-Muncie, IN CSA and also including Benton County, IN, Blackford County, IN, Carroll County, IN, Clinton County, IN, Fayette County, IN, Fountain County, IN, Grant County, IN, Lawrence County, IN, Monroe County, IN, Owen County, IN, Randolph County, IN, Rush County, IN, Tippecanoe County, IN, Tipton County, IN, Warren County, IN, and Wayne County, IN;
(30) Kansas City-Overland Park-Kansas City, MO-KS—consisting of the Kansas City-Overland Park-Kansas City, MO-KS CSA and also including Anderson County, KS, Jackson County, KS, Jefferson County, KS, Osage County, KS, Shawnee County, KS, Wabaunsee County, KS, Carroll County, MO, Daviess County, MO, Gentry County, MO, Henry County, MO, and Holt County, MO;
(31) Laredo, TX—consisting of the Laredo, TX MSA and also including Jim Hogg County, TX, and La Salle County, TX;
(32) Las Vegas-Henderson, NV-AZ—consisting of the Las Vegas-Henderson, NV CSA and also including Mohave County, AZ;
(33) Los Angeles-Long Beach, CA—consisting of the Los Angeles-Long Beach, CA CSA and also including Imperial County, CA, Kern County, CA, San Luis Obispo County, CA, and Santa Barbara County, CA;
(34) Miami-Port St. Lucie-Fort Lauderdale, FL—consisting of the Miami-Port St. Lucie-Fort Lauderdale, FL CSA and also including Okeechobee County, FL;
(35) Milwaukee-Racine-Waukesha, WI—consisting of the Milwaukee-Racine-Waukesha, WI CSA and also including Fond du Lac County, WI, and Sheboygan County, WI;
(36) Minneapolis-St. Paul, MN-WI—consisting of the Minneapolis-St. Paul, MN-WI CSA and also including Blue Earth County, MN, Brown County, MN, Dodge County, MN, Fillmore County, MN, Kanabec County, MN, Meeker County, MN, Morrison County, MN, Mower County, MN, Nicollet County, MN, Olmsted County, MN, Pine County, MN, Sibley County, MN, Wabasha County, MN, Waseca County, MN, and Polk County, WI;
(37) New York-Newark, NY-NJ-CT-PA—consisting of the New York-Newark, NY-NJ-CT-PA CSA and also including Warren County, NJ, Sullivan County, NY, Carbon County, PA, Lehigh County, PA, Northampton County, PA, Wayne County, PA, and all of Joint Base McGuire-Dix-Lakehurst;
(38) Omaha-Council Bluffs-Fremont, NE-IA—consisting of the Omaha-Council Bluffs-Fremont, NE-IA CSA and also including Fremont County, IA, Shelby County, IA, and Burt County, NE;
(39) Palm Bay-Melbourne-Titusville, FL—consisting of the Palm Bay-Melbourne-Titusville, FL MSA;
(40) Philadelphia-Reading-Camden, PA-NJ-DE-MD—consisting of the Philadelphia-Reading-Camden, PA-NJ-DE-MD CSA, except for Joint Base McGuire-Dix-Lakehurst, and also including Sussex County, DE, Somerset County, MD, Wicomico County, MD, Worcester County, MD, and Schuylkill County, PA;
(41) Phoenix-Mesa, AZ—consisting of the Phoenix-Mesa, AZ CSA;
(42) Pittsburgh-New Castle-Weirton, PA-OH-WV—consisting of the Pittsburgh-New Castle-Weirton, PA-OH-WV CSA and also including Belmont County, OH, Cambria County, PA, Greene County, PA, Somerset County, PA, Marshall County, WV, and Ohio County, WV;
(43) Portland-Vancouver-Salem, OR-WA—consisting of the Portland-Vancouver-Salem, OR-WA CSA and also including Wahkiakum County, WA;
(44) Raleigh-Durham-Cary, NC—consisting of the Raleigh-Durham-Cary, NC CSA and also including Caswell County, NC, Cumberland County, NC, Edgecombe County, NC, Halifax County, NC, Harnett County, NC, Hoke County, NC, Lee County, NC, Moore County, NC, Nash County, NC, Northampton County, NC, Robeson County, NC, Scotland County, NC, Warren County, NC, Wayne County, NC, and Wilson County, NC;
(45) Reno-Fernley, NV—consisting of the Reno-Carson City-Fernley, NV CSA, except for Carson City, NV, and Douglas County, NV, and also including Churchill County, NV;
(46) Richmond, VA—consisting of the Richmond, VA MSA and also including Brunswick County, VA, Cumberland County, VA, Essex County, VA, Greensville County, VA, Louisa County, VA, Nottoway County, VA, and Emporia city, VA;
(47) Rochester-Batavia-Seneca Falls, NY—consisting of the Rochester-Batavia-Seneca Falls, NY CSA;
(48) Sacramento-Roseville, CA-—consisting of the Sacramento-Roseville, CA CSA and also including Alpine County, CA, Amador County, CA, Butte County, CA, Colusa County, CA, Sierra County, CA, Carson City, NV, and Douglas County, NV;
(49) San Antonio-New Braunfels-Pearsall, TX—consisting of the San Antonio-New Braunfels-Pearsall, TX CSA and also including Gillespie County, TX, Gonzales County, TX, Karnes County, TX, Kerr County, TX, and McMullen County, TX;
(50) San Diego-Chula Vista-Carlsbad, CA—consisting of the San Diego-Chula Vista-Carlsbad, CA MSA;
(51) San Jose-San Francisco-Oakland, CA—consisting of the San Jose-San Francisco-Oakland, CA CSA and also including Calaveras County, CA, and Monterey County, CA;
(52) Seattle-Tacoma, WA—consisting of the Seattle-Tacoma, WA CSA and also including Clallam County, WA, Grays Harbor County, WA, Jefferson County, WA, Pacific County, WA, San Juan County, WA, and Whatcom County, WA;
(53) Spokane-Spokane Valley-Coeur d’Alene, WA-ID—consisting of the Spokane-Spokane Valley-Coeur d’Alene, WA-ID CSA and also including Benewah County, ID, Shoshone County, ID, Ferry County, WA, Lincoln County, WA, and Pend Oreille County, WA;
(54) St. Louis-St. Charles-Farmington, MO-IL—consisting of the St. Louis-St. Charles-Farmington, MO-IL CSA and also including Fayette County, IL, Greene County, IL, Montgomery County, IL, Randolph County, IL, Washington County, IL, Crawford County, MO, Gasconade County, MO, Iron County, MO, Madison County, MO, Montgomery County, MO, Pike County, MO, Ste. Genevieve County, MO, and Washington County, MO;
(55) Tucson-Nogales, AZ—consisting of the Tucson-Nogales, AZ CSA and also including Cochise County, AZ;
(56) Virginia Beach-Norfolk, VA-NC—consisting of the Virginia Beach-Norfolk, VA-NC CSA and also including Chowan County, NC, Hertford County, NC, Tyrrell County, NC, Middlesex County, VA, and Surry County, VA;
(57) Washington-Baltimore-Arlington, DC-MD-VA-WV-PA—consisting of the Washington-Baltimore-Arlington, DC-MD-VA-WV-PA CSA and also including Allegany County, MD, Caroline County, MD, Dorchester County, MD, Kent County, MD, Adams County, PA, Fulton County, PA, York County, PA, Caroline County, VA, King George County, VA, Orange County, VA, Shenandoah County, VA, Westmoreland County, VA, Hardy County, WV, and Mineral County, WV; and
(58) Rest of U.S.—consisting of those portions of the United States and its territories and possessions as listed in 5 CFR 591.205 not located within another locality pay area.

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