2% Pay Raise for Federal Employees in 2025

hey welcome to the money briefing my name is Jerell Harvey and I'm with fedway financial on this channel we cover topics related to personal finance Federal benefits and retirement planning in this video we're going to cover the latest update on the 2025 federal pay raise so here's the deal President Joe Biden formally announced his plans to put forward a 2% pay raise for civilian federal employees in 2025 although nothing is technically official at the moment it's very unlikely that anything would change between now and when President Biden signs an executive order for the salary increase around mid to late December the 2% pay raise consists of two parts includes a 1.7% across the board increase and a 3% average increase to locality pay depending on where you're located your actual pay rate may be slightly above or below the average however the proposed 3% locality adjustment is a little less than the typical 5% adjustment that federal employees have received in the past additionally the 2% salary bump is much lower than the 2024 average salary increase of 5.2% as well as a 2023 salary boost of 4.6% the raises in 2024 in 2023 were two of the largest increases ever due to high inflation rates but the proposed 2025 pay raise is much more in line with the average salary increases for the 10 years before 2023 also the 2% pay raise will only impact civilian federal employees who are still working for federal retirees the cost of living adjustment or Cola which impacts federal pensions and Social Security benefits won't be officially released until October once the inflation numbers are finalized for the third quarter once President Biden signs the pay raise into law the office of personnel management will release pay tables for each locality pay area and the salary increase will go into effect the First full pay period of 2025 which for most federal employees will begin on January 12th if you received any value from this video please click the like button you can also subscribe to our channel to get more content like this thank you for watching and we'll see you on the next money briefing