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U.S. Department of Health and Human Services
Office of Human Resources

2023 General Schedule Pay Tables Update

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The President approved the largest pay raise for federal employees in over twenty years. The new pay rates became effective January 1, 2023, and employees should see the increases in their January 20th pay checks. The Office of Human Resource’s compensation web page provides links to the 2023 pay tables. The Office of Human Resources receives questions about how the General Schedule (GS) locality pay tables are updated. The process begins with updating the GS non-locality base pay table. 

Creating the 2023 GS Base Pay Table

By law, GS pay in all geographic locations is increased across-the-board based on nationwide changes in the cost of non-federal salaries as reflected by the Employment Cost Index (ECI). However, the President has authority to issue an alternative across-the-board increase, and he exercised that authority for 2023, ordering a 4.1 percent increase via Executive Order Exit Disclaimer: You Are Leaving www.ihs.gov . The 2022 step 1 rate for each grade was increased by 4.1 percent and rounded to the nearest dollar to derive the 2023 step 1 rates. Each new 2023 step 1 rate was then divided by 30 to produce a standard Within-Grade Amount for each grade. The standard Within-Grade amount is then added to step 1 to derive the step 2 rate, added to step 2 to derive the step 3 rate, and so forth. GS-1 and GS-2 have some differences in their calculations that will not be discussed here. This two-step process results in the GS 2023 non-locality base pay table Exit Disclaimer: You Are Leaving www.ihs.gov . This table is the basis for creating all the GS locality pay tables.

Creating the 2023 GS Locality Pay Tables

The previous section described the process to update the GS non-locality base pay table. This section describes how the GS locality pay tables are created. Most GS employees are entitled to locality pay. Many people believe that locality pay is meant to compensate for the higher costs of living in various parts of the country. In fact, locality pay is based on a percentage rate that reflects pay levels for non-federal employees in different geographic areas as determined by pay surveys conducted by the U.S. Bureau of Labor Statistics Exit Disclaimer: You Are Leaving www.ihs.gov . The locality pay percentage for the “Rest of U.S.” locality pay table, which covers many IHS employees, increased from 16.20 percent in 2022 to 16.50 percent in 2023 based on these salary surveys. Each salary figure on the GS 2023 non-locality pay table was multiplied by 1.165 to create the 2023 Rest of U.S. locality pay area table Exit Disclaimer: You Are Leaving www.ihs.gov . The locality table construction differs from the GS non-locality base table, in which steps 2-10 are derived by adding the standard Within-Grade Amount for each grade. GS locality pay tables do not have standard Within-Grade Amounts. Biweekly pay is based on the respective GS locality pay table. You can perform this same calculation for whichever locality area you work in if you know your area’s locality pay percentage (see Schedule 9 of the President’s Executive Order) and you have access to the GS 2023 non-locality base pay table Exit Disclaimer: You Are Leaving www.ihs.gov . Note that by law GS locality pay rates are limited to the rate for Level IV of the Executive Schedule ($183,500 in 2023) so certain steps of the grade 15 pay range may be capped at this amount.

Calculating the Total Increases to the General Schedule Locality Pay Tables

The first two sections described the process to update the GS non-locality pay table and the various GS locality pay tables. This section focuses on this question: “If the across-the-board general increase was 4.1 percent, and the Rest of U.S. (RUS) locality percentage increased by .3 percent (16.20 percent in 2022 to 16.50 percent in 2023), why does the 2023 RUS locality pay area table Exit Disclaimer: You Are Leaving www.ihs.gov  state ‘Total Increase: 4.37%’? Shouldn’t the total increase be the sum of the 4.1 percent across-the-board increase and the .3 percent increase to the locality pay percentage, and therefore be 4.4 percent?” The short answer is no, the total increase to the RUS area locality pay is 4.37 percent. The answer lies in the fact that the across-the-board increase percentage is not the same as the increase to the locality pay percentage. 

Here are the calculations used to determine the total increase in locality pay:

  1. Calculating the correct total percentage increase for the RUS locality pay area requires taking into consideration that the RUS locality pay area 2022 base is 1.1620, not 1, since the 2022 RUS locality percentage was 16.20 percent. 
  2. Since the base is already greater than 1, adding 0.3 percentage point to the RUS locality pay percentage (to get 1.1650) will result in a locality pay increase lower than 5.06 percent. 
  3. The calculation is 1.1650 (2023 RUS locality pay) multiplied by 1.041 (2023 across-the-board increase), divided by 1.1620 (2022 RUS locality pay). This equals a rounded total increase of 4.37 percent to the 2023 RUS area GS locality pay.

Intuitive? Unfortunately, not. The same calculations can be performed to determine the total increases to any of the 2023 GS locality pay tables.