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Chapter 1, Section 2: General Pay Computation Procedures

The General Schedule is the federal government's main pay system that sets the pay rates for employees in most white-collar positions not at the senior executive or other senior levels.

General Pay Computation Procedures

Most federal employees work schedules consisting of an eight-hour day, five-day, 40-hour workweek. Hourly rates of pay for General Schedule employees (which are used, for example, for overtime-calculation purposes) are computed by dividing a worker's annual rate of pay by 2,087 and rounding to the nearest cent. To compute an employee's bi-weekly pay, the hourly rate must be multiplied by 80. If computing compensation for fractional pay periods (that is, partially paid periods resulting from separations, retirements, use of leave without pay, etc.), the amount of pay is determined by multiplying the employee's hourly rate by the number of hours or fractions of hours.

The standard federal workday is eight hours. The law provides overtime for certain employees for work in excess of eight hours in a day, or in excess of 40 hours in the workweek (see Section 6 of this chapter); special rules apply to employees who work under alternative work schedules (see Chapter 8, Section 2). There are also pay differentials for working at night, on Sundays, on holidays and for various other reasons (see Section 7 of this chapter).

An employee must receive the greatest of the following rates of pay, as applicable:

  • the scheduled annual rate of pay payable to the employee;
  • a special rate under 5 CFR Part 530, subpart C, or a similar rate under other legal authority (for example, 38 U.S.C. 7455);
  • a locality rate under 5 CFR Part 531, subpart F, or a similar rate under other legal authority; or
  • a retained rate under 5 CFR Part 536 or saved rate under 5 CFR Part 359, subpart G, or a similar rate under other legal authority.

A GS pay computation example is at www.opm.gov/oca/pay/html/computerates.asp. Fact sheets on pay and hours of work are at www.opm.gov/oca/pay/html/factindx.asp.

Worksite for Location-Based Pay Purposes

Certain location-based pay entitlements (such as locality payments, special rate supplements, travel, transportation, and relocation benefits, and non-foreign area cost-of-living allowances) are based on the location of the employee's official worksite for his or her position of record. Generally, the official worksite is the location of an employee's position of record where the employee regularly performs his or her duties or, if the employee's work involves regular travel or the employee's work location varies on a daily basis, where his or her work activities are based, as determined by the employing agency. An agency must document an employee's official worksite on the employee's Notification of Personnel Action (Standard Form 50 or equivalent).

If an employee is in temporary duty travel status away from the official worksite for the employee's position of record and is eligible for temporary duty travel allowances such as per diem, the employee's pay entitlements based on that official worksite are not affected.

If an employee is temporarily detailed to a position in a different geographic area and is eligible for temporary duty travel allowances, the employee's official worksite for his or her position of record and associated pay entitlements are not affected.

If an employee is authorized to receive relocation allowances under 5 U.S.C. 5737 and 41 CFR Part 302-3, subpart E, in connection with long-term assignment (six to 30 months), the work location for the long-term assignment is considered the employee's official worksite for pay purposes.

If an employee is temporarily reassigned or promoted to a position in a different geographic area, the work location for the position to which temporarily reassigned or promoted is considered the employee's official worksite for pay purposes.

For telecommuters, an agency determines the official worksite on a case-by-case basis.

Also see Official Duty Station in Chapter 8, Section 1, and www.opm.gov/oca/pay/html/Official_Duty_Station.asp.

Pay Caps

There are various limitations on the pay that employees may receive, including special rules for special rates, locality pay and premium pay. See the accompanying Maximum Pay Limitations table for General Schedule positions, the pertinent sections of Section 1 of this chapter for other major salary systems, and Aggregate Limit on Compensation, below, for special rules for certain high-level salary systems.

Maximum Pay Limitations

Type of Pay Limit

Maximum Limit

Reference

General Schedule (excluding any locality payment or special rate supplement) General schedule plus special rate supplement Level V of Executive Schedule 5 U.S.C. 5303(f)
General schedule plus special rate supplement (5 U.S.C. 5305) Minimum rate may not exceed 30% of maximum rate for grade; maximum rate may not exceed Level IV of the Executive Schedule 5 U.S.C. 5305(a) and 5 CFR 530.304(a)
General Schedule, plus locality payment

Level IV of the Executive Schedule

5 U.S.C. 5304(g)(1) and 5 CFR 531.606b)
Biweekly limitation on premium pay (see note 1) Greater of biweekly rate for GS-15, step 10 or Level V of Executive Schedule 5 U.S.C. 5547(a) and 5 CFR 550.105
Annual limitation on premium pay for emergency work or for work critical to the mission of an agency (see note 2) Greater of annualized rate for GS-15, step 10, or Level V of Executive Schedule 5 U.S.C. 5547(b)(1) and (b)(2) and 5 CFR 550.106 and 550.107
Aggregate limitation on pay (see note 3)

Level I of Executive Schedule

5 U.S.C. 5307 and 5 CFR 530.203

NOTES

  1. Under 5 U.S.C. 5547(a) and 5 CFR 550.105, GS employees may receive certain types of premium pay in a pay period only to the extent that the aggregate of basic pay and premium pay for the pay period does not exceed the greater of the biweekly rate for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) level V of the Executive Schedule. (See notes 2 and 4 for exceptions to this rule.)
  2. Under 5 U.S.C. 5547(b) and 5 CFR 550.106 and 5 CFR 550.107, the head of an agency may apply an annual pay cap to certain types of premium pay for any pay period for (1) employees performing work in connection with an emergency, including work performed in the aftermath of such an emergency, or (2) employees performing work critical to the mission of the agency. Such employees may receive certain types of premium pay only to the extent that the aggregate of basic pay and premium pay for the calendar year does not exceed the greater of the annualized rate for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) level V of the Executive Schedule. (See 5 CFR 550.107(d) regarding method of computing this annualized rate.)
  3. Except as described below, an employee may not receive any portion of any allowance, differential, bonus, award, or other similar payment under Title 5, United States Code, in any calendar year, which when combined with the employee's basic pay would cause the employee's aggregate compensation (including premium pay) to exceed the rate for level I of the Executive Schedule at the end of the calendar year. See 5 CFR 530.202 for definitions of "basic pay" and "aggregate compensation." For SES, SL and ST employees, the limit is the Vice President's salary if they are working in an agency whose performance plan for them is certified as making "meaningful distinctions based on relative performance."
  4. Section 1105 of P.L. 109-364, as later amended, authorizes the head of an agency to waive the premium pay cap provisions under 5 U.S.C. 5547 for civilian employees who perform work while in an overseas location that (1) is in the area of responsibility of the U.S. Central Command (Centcom) or (2) was formerly in the Centcom area of responsibility but has been moved to the area of responsibility of the commander of the U.S. Africa Command. The overseas work must meet one of two additional qualifying conditions: (1) performance of work in direct support of or directly related to a military operation, including contingency operation as defined in 10 U.S.C. 101(a)(13), or (2) performance of work in direct support of or directly related to an operation in response to an emergency declared by the president. The annual limitation on basic pay and premium pay allowed under the waiver authority is the annual rate of salary payable to the Vice President.

Biweekly and Annual Limits on Premium Pay-- Under 5 U.S.C. 5547(a) and 5 CFR 550.105, General Schedule employees and other covered employees may receive certain types of premium pay for a biweekly pay period only to the extent that the sum of basic pay and premium pay for the pay period does not exceed the greater of the biweekly rate payable for GS-15, step 10 (including any applicable locality payment or special rate supplement), or the rate payable for Level V of the Executive Schedule. The biweekly rate is computed by dividing the applicable annual rate by 2,087 hours, rounding the resulting hourly rate to the nearest cent, and multiplying the hourly rate by 80 hours.

For information on the annual limits on pay, see Aggregate Limit on Compensation, below.

Under 5 U.S.C. 5547(a), an employee, including a law enforcement officer, may receive premium pay in a pay period only to the extent that the aggregate of basic pay and premium pay for the pay period does not exceed the greater of the biweekly rate for (1) GS-15, step 10 (including any applicable special salary rate or locality rate of pay), or (2) Level V of the Executive Schedule. (See 5 U.S.C. 5547(a), as amended, and 5 CFR 550.105.)

Under 5 U.S.C. 5547(b), the biweekly premium pay cap in section 5547(a) does not apply in any pay period during which an employee, including a law enforcement officer, receives premium pay for work in connection with an emergency (including a wildfire emergency) that involves a direct threat to life or property. Work in connection with an emergency includes work performed in the aftermath of the emergency. Such employees may receive premium pay to the extent that the aggregate of basic pay and premium pay for the calendar year does not exceed the greater of the annual rate for (1) GS-15, step 10 (including any applicable special salary rate or locality rate of pay), or (2) Level V of the Executive Schedule.

Under 5 U.S.C. 5547(b), the head of an agency with discretionary authority may waive the biweekly premium pay limitation in section 5547(a) for an employee, including a law enforcement officer, who receives premium pay to perform work critical to the mission of the agency. Such employees may receive premium pay to the extent that the aggregate of basic pay and premium pay for the calendar year does not exceed the greater of the annual rate for (1) GS-15, step 10 (including any applicable special salary rate or locality rate of pay), or (2) Level V of the Executive Schedule.

The biweekly pay limitation in 5 U.S.C. 5547 is also a ceiling on compensatory time off, which is an alternative form of payment for overtime work. Thus, the number of hours for which an employee may receive monetary overtime pay is also the number of hours of compensatory time off that may be credited in a pay period. An employee may not exceed the biweekly pay limitation by choosing compensatory time off as a substitute for monetary overtime pay.

Premium Pay for National Emergency-- Agencies have authority under 5 U.S.C. 5547(b) and 5 CFR 550.106 to make exceptions to biweekly premium pay limitations for civilian employees who perform emergency work in support of the National Emergency declared by the Presidential Proclamation of September 14, 2001.

The head of an agency may apply an annual cap to certain types of premium pay for any pay period for employees performing work in connection with an emergency, including work performed in the aftermath of such an emergency, or employees performing work critical to the mission of the agency. Such employees may receive certain types of premium pay to the extent that the aggregate of basic pay and premium pay for the calendar year does not exceed the greater of the annual rate for GS-15, step 10 (including any applicable special salary rate or locality rate of pay), or Level V of the Executive Schedule.

Note: Under 5 CFR 550.107, the following types of premium pay remain subject to a biweekly limitation when other premium payments are subject to an annual limitation: standby duty pay under 5 U.S.C. 5545(c)(1); administratively uncontrollable overtime pay under 5 U.S.C. 5545(c)(2); availability pay for criminal investigators under 5 U.S.C. 5545a; and overtime pay for hours in a firefighter's regular tour of duty covered by 5 U.S.C. 5545b.

Waiver Authority-- Under annual Defense Department authorization laws beginning with Public Law 109-163, Section 1105, agencies may waive the annual aggregate pay limitation, setting a limit of the Vice President's salary instead, for employees assigned to an overseas location in the area of responsibility of the Commander of the U.S. Central Command (or that was formerly in that area of responsibility but has been moved to the area of responsibility of the Commander of the U.S. Africa Command). The Defense and State departments have exercised this authority department-wide; employees of other agencies should check their status. To be eligible, employees must remain in the command's area of responsibility for at least 42 consecutive calendar days (the period may overlap calendar years) and perform work in direct support of, or directly related to, a military operation or directly related to an operation in response to an emergency declared by the President. Waiver authority primarily applies to employees assigned to Iraq or Afghanistan but also includes several other countries. The Executive Schedule Level I aggregate limitation on pay (see below) still applies. Amounts exceeding that cap up to the Vice President's salary are payable in the next calendar year. Guidance is in a March 3, 2011, memo at www.chcoc.gov/transmittals.

Other Exceptions-- Certain categories of employees are subject to different caps. For example, a cap of 5 percent above the Executive Schedule Level IV rate applied to employees under DoD's National Security Personnel System. When employees paid above that rate were transferred out of NSPS due to its termination, they were allowed to retain their salary rates (see Alternative Personnel Practices in Chapter 8, Section 7). Also, the cap applying to Government Accountability Office employees in the top pay band there is the Level III rate.

Aggregate Limit on Compensation

Under 5 U.S.C. 5307, there is a limit on total annual compensation for most federal employees--the aggregate of basic pay, allowances, differentials, bonuses, awards, or other similar cash payments (see below)--at the Level I rate of the Executive Schedule. The limitation on pay applies to all Executive Branch employees, General Schedule (GS) employees in the Legislative Branch, and GS employees in the Judicial Branch (excluding those paid under 28 U.S.C. 332(f), 603, and 604). Certain Executive Branch employees may be excluded from the aggregate limitation on pay under 5 U.S.C. 5307 by other laws but may be subject to similar provisions administered by their agencies.

The limit for members of the Senior Executive Service (SES) and employees in senior level (SL) and senior scientific or technical (ST) positions is the total annual compensation payable to the Vice President under 3 U.S.C. 104 if the Office of Personnel Management, with the concurrence of the Office of Management and Budget, certifies that the agency has a performance appraisal system that makes "meaningful distinctions based on relative performance." If an agency's performance appraisal system has not been certified, its aggregate limitation on compensation for those employees is the same as that for all other employees, Level I of the Executive Schedule. Most agencies have that certification.

Basic pay is defined as the total amount of pay received at a rate fixed by law or administrative action for the position held by an employee, including any special rate under 5 CFR Part 530, subpart B, or any locality-based comparability payment under 5 CFR Part 531, subpart F, or other similar payment under other legal authority, before any deductions. Basic pay includes night and environmental differentials for prevailing rate employees under 5 U.S.C. 5343(f) and 5 CFR 532.511. Basic pay excludes additional pay of any other kind.

Under 5 CFR 530.202, aggregate compensation for purposes of the cap is defined as:

  • basic pay received as an employee of the Executive Branch or as an employee outside the Executive Branch to whom the General Schedule applies;
  • locality payments under 5 U.S.C. 5304; continued rate adjustments under 5 CFR Part 531, subpart G; or special pay adjustments for law enforcement officers under section 404 of the Federal Employees Pay Comparability Act of 1990 (Public Law 101-509);
  • premium pay under 5 U.S.C. Chapter 53, subchapter IV;
  • premium pay under 5 U.S.C. Chapter 55, subchapter V;
  • incentive awards and performance-based cash awards under 5 U.S.C. Chapters 45 and 53;
  • recruitment, retention and relocation incentives under 5 U.S.C. 5753 and 5754;
  • extended assignment incentives under 5 U.S.C. 5757;
  • supervisory differentials under 5 U.S.C. 5755;
  • post differentials under 5 U.S.C. 5925;
  • danger pay allowances under 5 U.S.C. 5928;
  • post differentials based on environmental conditions for employees stationed in non-foreign areas under 5 U.S.C. 5941(a)(2);
  • physicians' comparability allowances under 5 U.S.C. 5948;
  • continuation of pay under 5 U.S.C. 8118;
  • lump-sum payments in excess of the aggregate limitation on pay as required by 530.204; and
  • other similar payments authorized under Title 5, United States Code, excluding: overtime pay under the Fair Labor Standards Act and 5 CFR Part 551; severance pay under 5 U.S.C. 5595; lump-sum payments for accumulated and accrued annual leave upon separation under 5 U.S.C. 5551 or 5552; back pay awarded to an employee under 5 U.S.C. 5596 because of an unjustified personnel action; student loan repayments under 5 U.S.C. 5379; and non-foreign area cost-of-living allowances under 5 U.S.C. 5941(a)(1).

Payments in excess of the aggregate limitation on pay (other than basic pay) must be deferred and are generally paid as a lump-sum payment at the beginning of the following calendar year. Detailed policies on payment of excess amounts are at www.opm.gov/oca/pay/HTML/aggregatelimitation.asp.

Certification Standards-- Rules at 5 CFR Part 430 and 5 CFR Part 1330 establish standards for OPM and OMB to assess whether performance appraisal systems make meaningful distinctions based on relative performance for purposes of determining the SES basic pay caps (see Senior Executive Service in Section 1 of this chapter) and the SES, SL and ST aggregate compensation caps in an agency. "Relative performance" in this context does not require ranking senior employees against each other; such ranking is prohibited for the purpose of determining performance ratings. The factors require linkage between performance expectations and the agency's mission and goals, involvement of senior employees in their drafting, an emphasis on measurable results, performance differentiation and high level oversight.

Agencies must apply for certification by supplying OPM with documents including a sample of individual senior employee performance plans and ratings data for each senior employee for the last two appraisal periods. Agencies may submit a single request for certification of several SES and/or senior level and senior scientific and technical appraisal systems or requests for certification of each system.

Under some circumstances, provisional certification may be granted for one calendar year with a possible one-year extension. Agencies with fully or provisionally certified systems may set SES, SL and ST rates of basic pay up to the rate for Level II of the Executive Schedule.

Military Retirees: Dual Compensation Rules

Military retirees who accept federal employment were subject, for many years, to restrictions on the amount of "dual compensation" they could receive (that is, the combination of their military retirement pay and salary from their federal position). Generally, these retirement pay restrictions applied to all retired, regular officers who became employed in a civilian position. However, the fiscal year 2000 National Defense Authorization Act (P.L. 106-65) repealed that provision of the Dual Compensation Act effective October 1, 1999.

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