Locality pay increase 2025 refers to the potential increase in wages for federal employees in specific geographic areas where the cost of living is higher than the national average. Locality pay is a form of supplemental pay that is added to the base salary of federal employees in these areas to help offset the increased cost of living. Locality pay rates are determined by the Office of Personnel Management (OPM) and are based on factors such as housing costs, transportation costs, and other living expenses.Locality pay increases are important because they help to ensure that federal employees are able to maintain a reasonable standard of living in areas where the cost of living is higher. Without locality pay, federal employees in these areas would be at a financial disadvantage compared to their colleagues in areas with lower costs of living.Locality pay has been a part of the federal pay system for many years. The current locality pay system was established in 1990, and it has been updated several times since then. The most recent locality pay increase was in 2020.
The locality pay increase for 2025 has not yet been determined, but it is expected to be announced in late 2024. The increase will be based on data from the Bureau of Labor Statistics on the cost of living in each locality.
