Most civilian federal employees are set to receive a 2% federal pay raise beginning in January, after President Joe Biden signed an executive order Monday, finalizing the 2025 raise for the General Schedule.

Biden’s executive order aligns with his planned federal pay raise in August, which accounts for a 1.7% across-the-board increase, as well as an average of a 0.3% locality pay adjustment, totaling to 2% on average.

The 2% federal pay raise proposal originated in the Biden administration’s budget request for fiscal 2025. The budget request also called for a 4.5% military pay raise. The fiscal 2025 National Defense Authorization Act includes a 4.5% raise for military members.

For civilian employees, Biden’s signing of the executive order was the final step of the process to make the federal pay raise official. Although in some past years, Congress has occasionally legislated its own separate federal pay raise proposal, the topic of the federal pay raise was not included in any legislation this year ahead of the Dec. 31 deadline for Biden to sign the executive order.

Importantly, the 2% raise for 2025 is also an average. Depending on where federal employees are located, the actual raise they’ll see in the new year will be slightly above or below that.

The 2% federal pay raise for 2025 is also more modest than the 5.2% average boost that most feds received at the beginning of 2024. The 5.2% boost was the largest federal pay raise in more than 40 years.

Although the finalization of the 2025 civilian federal pay raise aligns with the administration’s plans from earlier this year, some Democrats in Congress had previously urged Biden to issue a new alternative pay plan to give the civilian federal workforce a 4.5% raise in alignment with the military’s planned pay raise.

The Office of Management and Budget said a 2% federal pay raise “recognizes the federal workforce’s dedication and service to the American people and positions the federal government to better compete in the labor market to attract and retain a well-qualified federal workforce while accounting for the fiscal constraints federal agencies face in fiscal 2025.”

The Office of Personnel Management has published the 2025 pay tables, detailing the exact amount of the pay increases based on each locality pay area for the General Schedule.

The variation in pay based on locality pay areas originates from the 1990 Federal Employees Pay Comparability Act (FEPCA). The law was an attempt to lessen an increasing wage gap between federal and private sector employees. The most recent report from the Federal Salary Council shows that federal employees earned 24.72% less than their private sector counterparts in salary over the last year.

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