President Donald Trump issued the 2026 Alternative Pay Plan Letter on August 28, 2025, outlining pay adjustments for civilian federal employees under the General Schedule and certain other pay systems.
Federal employees will receive a 1% across-the-board base pay increase, effective from the first pay period beginning on or after January 1, 2026. This was a surprise move, as the White House’s 2026 budget proposal omitted mention of a pay raise, leading to expectations of a pay freeze. This 1% raise is the smallest annual increase since 2021.
Locality pay adjustments will be set at zero, meaning no additional increases based on geographic location.
Certain federal law enforcement officers will receive a higher raise, aligned with the 3.8% pay increase for military personnel set by law. The alternative pay plan instructs the Office of Personnel Management (OPM) to identify eligible categories of LEOs to enhance recruitment and retention in critical roles.
The letter emphasizes balancing fair compensation to attract and retain a skilled workforce with fiscal responsibility, aligning with the administration’s goals of streamlining the federal workforce and reducing spending. Trump cited merit and practical skills as key factors in pay decisions.
The plan is authorized under Title 5, U.S. Code (5 U.S.C. 5303(b) and 5304a), allowing the president to issue alternative pay plans if automatic increases under the Federal Employees Pay Comparability Act (FEPCA) are deemed inappropriate due to economic or national emergency conditions.
While a pay freeze was anticipated due to the budget’s silence and Trump’s historical tendency to propose freezes (overruled by Congress in prior years), the 1% raise defied expectations. Congress still has the option to set a different raise amount in this year’s general appropriations bill, and if that measure is signed into law before year-end, it would supersede Trump’s alternative pay plan letter.
