General Pay Computation Procedures
General Pay Computation Procedures
Most federal employees work schedules consist of a 40-hour workweek, most commonly five eight-hour days (see Alternative Work Schedules in Chpater 8, Section 2 for variants). 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 biweekly 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 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 530 subpart C, or a similar rate under other legal authority (for example, 38 U.S.C. 7455);
• a locality rate under 5 CFR 531 subpart F, or a similar rate under other legal authority; or
• a retained rate under 5 CFR 536 or saved rate under 5 CFR 359 subpart G, or a similar rate under other legal authority.
Fact sheets on pay and hours of work, including one on how to compute rates of pay, are at www.opm.gov/policy-data-oversight/pay-leave/pay-administration.
Worksite for Location-Based Pay Purposes
Certain location-based pay entitlements (such as locality payments, special rate supplements, and travel, transportation and relocation benefits) are based on the location of the employee’s official duty station. Generally, that is where the employee regularly performs his or her duties or, if the work involves regular travel or the location varies on a daily basis, where the 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 302-3 subpart E, in connection with a 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 official worksite for pay purposes.
For employees who telework, an agency determines the official worksite on a case-by-case basis.
Also see Official Duty Station in Chapter 8, Section 1, and the fact sheet at www.opm.gov/policy-data-oversight/pay-leave/pay-administration.
There are various limitations on the pay that employees may receive, including 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 rules for certain high-level salary systems.
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. Also 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 5 U.S.C. 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.
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.
Waivers—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 rate instead, for employees who work for at least 42 consecutive calendar days in certain designated locations in direct support of, or directly related to, a military operation or an operation in response to an emergency declared by the President. The Defense and State departments have exercised this authority department-wide; employees of other agencies should check their status. Guidance on which areas qualify and other matters is in annual compensation policy memoranda at www.opm.gov/policy-data-oversight/pay-leave/reference-materials. The Executive Schedule Level I aggregate limitation on pay (see below) still applies. Amounts exceeding that cap up to the Vice President’s salary rate are payable in the next calendar year. Also see the information under Special-Status Foreign Areas at www.opm.gov/policy-data-oversight/pay-leave/pay-administration.
Also, in response to exceptional mission needs for employees to work overtime, Congress sometimes has enacted agency-specific laws temporarily waiving limits for certain occupations; check with your agency to determine if such a waiver is in effect. Typically, compensation paid in excess of regular limits due to such waivers is not considered basic pay for an individual’s high-3 salary for retirement calculation or for other purposes.
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 on its termination, they were allowed to retain their salary rates (see Alternative Personnel Practices in Chapter 8, Section 7 and the fact sheet at www.opm.gov/policy-data-oversight/pay-leave/pay-administration). 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 Vice President’s salary rate 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 530 subpart B, or any locality-based comparability payment under 5 CFR 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 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. 53 subchapter IV;
• premium pay under 5 U.S.C. 55 subchapter V;
• incentive awards and performance-based cash awards under 5 U.S.C. 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;
• physicians’ comparability allowances under 5 U.S.C. 5948;
• post differentials based on environmental conditions for employees stationed in non-foreign areas under 5 U.S.C. 5941(a)(2);
• continuation of pay under 5 U.S.C. 8118;
• lump-sum payments in excess of the aggregate limitation on pay as required by 5 CFR 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 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; and student loan repayments under 5 U.S.C. 5379.
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 in fact sheets at www.opm.gov/policy-data-oversight/pay-leave/pay-administration.
Certification Standards—Rules at 5 CFR 430 and 1330 establish standards for OPM and OMB to assess whether performance appraisal systems make meaningful distinctions based on relative performance for purposes of determining caps on basic pay and on aggregate compensation for senior executives and for senior level and senior scientific and technical employees, as described in Senior Executive Service and Other High-Level Systems in Section 1 of this chapter. “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. Guidance is in November 14, 2018 and November 25, 2019 memos at www.chcoc.gov/transmittals.