Uncle Sam Offers A Good Benefits Package—Including Locality Pay
Federal employees see a deluge of information from various sources about what other people think it is like working for Uncle Sam. The reality is, there are many different circumstances for government employees. Your work environment will vary by geographic location, your agency, and the type of job you have.
The benefits package is largely the same for different agencies—although some agencies have a higher pay system, usually enabled by legislation.
Every year, headlines scream about how underpaid federal employees are and why they should be making 25% or 30% more in salary. For some, that is probably true. The overall impact of this publicity and negative comments about working for the government have an impact on the attitudes of some employees in the workforce.
For those who are new to government, some of this negativity may be a surprise. For those who have worked for Uncle Sam for decades, it is just old news and business as usual. But, over time, the negative approach seeps in and becomes part of life in the federal government.
Average Age of Federal Employees
Federal employment is a good job to get. The benefits are good. When organizations tell people they are seriously underpaid (the average federal employee salary now is about $107,000 before the 2025 pay raise kicks in), the salary figures quoted exclude the benefits package.
The average age of federal employees in the General Schedule (GS) pay system has been documented to be around 47.5 years old based on data from the Office of Personnel Management (OPM). This figure is a consistent average age over a few years, with slight fluctuations but generally staying around this mark.
In recent years, there were more full-time permanent federal employees in the 50–54 age bracket than any other age group.
There were more full-time permanent federal employees in the 50–54 age bracket than any other age group in 2022. Retirement-age federal employees outnumber younger employees by two to one.
This means most federal employees stick around for a long time. While they may believe they are underpaid, and perhaps that is the case, they still remain as a federal employee.
Regarding whether the average age of federal employees is higher compared to most companies, federal employment tends to have an older average age due to several factors including job stability, comprehensive benefits, and less turnover than private-sector companies.
The federal government often retains employees for longer periods because of its retirement benefits and the nature of its work, which can be less sensitive to economic cycles than private sector jobs.
2025 GS Pay Scale—and Which LPA’s Have Higher Raises
What is locality pay, and what is a locality pay area (LPA)?
The 2025 GS pay scale is based on a 2% overall average pay raise for federal employees. The 2025 GS pay scale incorporates a 2025 federal pay raise with an overall average increase of 2%. This consists of a General Schedule (GS) base pay increase of 1.7% and a 2025 GS locality pay increase of 0.3%.
The federal government’s locality pay system started in January 1994. The legal basis for this system is the Federal Employees Pay Comparability Act of 1990 (FEPCA), which was enacted to address pay disparities between federal and non-federal workers in various geographic areas. This act aimed to make federal salaries more competitive with those in the private sector by implementing locality-based comparability payments for General Schedule (GS) employees.
Since 2015, the federal government’s locality pay areas (LPA) have increased from 34 to 58, or about 71%. This increase includes the four new areas designated as LPAs in 2024. Locality pay areas have different pay rates for the federal government’s general schedule employees. The rate of any pay increase frequently varies between the pay areas.
What is a Locality Pay Area?
A locality pay area is a geographic region designated by the federal government where federal employees receive a locality-based pay adjustment in addition to their base pay. The adjustment makes federal salaries competitive with non-federal (private sector, state, and local government) salaries in the same area, accounting for regional differences in labor market conditions.
The criteria used to create new LPAs are listed later in this article. The pay disparity in the higher paying locality areas between federal pay and the private sector is often calculated as being greater in the different metropolitan areas with a higher pay scale.
The Federal Salary Council (FSC) proposed adding about 15,000 federal employees to existing locality pay areas for 2025 from the “Rest of the U.S.” Being added to a locality pay area usually results in higher pay for impacted employees.
The “Rest of the US” category of locality pay is shrinking. In late 2023, about 69% of federal employees were in a locality pay area outside the “Rest of the U.S.” These figures do not include approximately 33,000 federal employees added to the system for 2024.
Lowest Locality Pay Raises for 2025
The chart below displays the areas receiving the lowest locality pay raises for 2025. To give a broader perspective of the pay system, increase in salary for one grade at step 5 has been included to show how much the pay has gone up over the last five years. The same data is included in the 2nd chart listing the LPAs with the highest pay raised in 2025.
Locality Pay Area | 2025 Percentage Increase | GS 12, Step 5 pay for 2025 | GS 12, Step 5 pay for 2020 | % Change from 2020 to 2025 |
Cleveland-Akron-Canton, OH-PA | 1.88% | $104,876 | $90,604 | 15.75% |
Cincinnati-Wilmington-Maysville, OH-KY-IN | 1.90% | $104,618 | $90,402 | 15.73% |
Corpus Christi-Kingsville-Alice, TX | 1.90% | $100,929 | $87,410 | 15.47% |
Miami-Port St. Lucie-Fort Lauderdale, FL | 1.90% | $106,969 | $92,621 | 15.49% |
Houston-The Woodlands, TX | 1.91% | $115,833 | $99,978 | 15.86% |
Rest of U.S. | 1.91% | $100,440 | $86,952 | 15.51% |
Highest Locality Pay Raises for 2025
Locality Pay Area | 2025 Percentage Increase | GS 12, Step 5 pay for 2025 | GS 12, Step 5 pay for 2020 | % Change from 2020 to 2025 |
San Diego-Chula Vista-Carlsbad, CA | 2.21% | $114,734 | $97,316 | 17.90% |
Washington-Baltimore-Arlington, DC-MD-VA-WV-PA | 2.22% | $114,923 | $97,848 | 17.45% |
New York-Newark, NY-NJ-CT-PA | 2.23% | $118,364 | $100,473 | 17.81% |
Seattle-Tacoma, WA | 2.29% | $112,890 | $95,254 | 18.51% |
San Jose-San Francisco-Oakland, CA | 2.35% | $125,563 | $106,067 | 18.38% |
As the five-year increase data suggests, the areas that are receiving the highest pay raise in 2025 are often among the highest LPAs for a pay raise. Over time, the smaller differences between areas in any one year add up to a significantly higher salary.
Criteria Used for Creating a Locality Pay Area
There is often a lot of confusion or misinformation about locality pay areas. If you asked most people about the most important factor that determines how an area is designated as a locality pay area, they would say “cost of living.”
In fact, cost of living is not a direct factor in deciding whether an LPA will be created. Here are the factors that are considered:
- Pay Disparity between federal and non-federal salaries in an area
- Geographic Boundaries. MSAs and CSA are often aligned with LPAs
- Employment Interchange Rate: Commuting patterns between an existing locality pay area and the proposed area of application, ensuring that there is a significant labor market connection
- GS Employment Numbers in an area have historically been considered.
- Labor Market Factors: Local labor market practices, commuting patterns, and the overall pay levels for non-federal jobs in the area.
- Telework and Remote Work Arrangements
Cost of living is not included in this list. But, of course, these factors all play at least an indirect role in the cost of living in a metropolitan area.
Locality pay increases are based on a comparison by the Bureau of Labor Statistics (BLS). 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 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. The cost of housing or other living expenses in an area is not the major factor.