2026 Pay Freeze Ahead: What Trump’s Letter Really Means for Feds

August 27, 2025

Most federal employees count on at least a modest raise each year.

But this time, the White House is signaling something different:

President Trump is expected to notify Congress by the end of August that no 2026 pay raise will be provided for federal civilian workers.

That move would block a massive automatic increase — currently estimated at more than 25% — from taking effect under federal pay law.

What’s in Play

  • No Raise in 2026: Without congressional intervention, base salaries will be frozen.

  • Retirement Contribution Hike: Employees hired before 2013 may see a 1.8% increase in FERS contributions starting in January 2026, followed by another hike in 2027.

  • Other Cuts Could Return: Proposals to eliminate the FERS supplement and shift pensions from a “high-3” to a “high-5” calculation nearly passed this year and could resurface.

Military vs. Civilian

  • Federal civilians: Pay freeze.

  • Service members: A 3.8% raise, framed by the White House as recognition of military sacrifice.

How We Got Here

  • Under President Biden: raises of 2.7% (2022), 4.6% (2023), 5.2% (2024), and 2% (2025).

  • Under Trump’s first term: increases between 1.9% and 3.1%, often after Congress adjusted the administration’s proposals.

Planning Corner: Protecting Your Paycheck

If this freeze and contribution hike go through, here are three steps to consider:

  1. Review your TSP contributions. Even a small increase can offset higher FERS deductions.

  2. Adjust for health premiums. Flat pay plus rising FEHB costs will squeeze take-home pay.

  3. Run a pension projection. See how these changes impact your “high-3” average and retirement timeline.

Bottom Line

A pay freeze combined with higher retirement deductions means less take-home pay, slower pension growth, and more reliance on your TSP.

Planning ahead now can prevent a tough surprise in 2026.

Best,
—FWR